The Intersection of Fintech and the Gig Economy

India's gig economy currently employs about 15 million workers and is projected to grow at a CAGR of 17% to reach $455 billion in revenue by 2024. With over 25 million gig jobs available in the short to medium term, major new age platforms alone account for around 30-35% of the total gig employment. It is estimated that 200 million workers, including digital gig workers, manual workers, and temporary workers, will join the gig economy in the next five years.

At this growth rate, the gig economy will inevitably overlap with various industries and adjacent service sectors. This overlap and fulfillment will further break down to meet the needs of gig workers based on their skill levels and the segments in which they operate (blue-collar and white-collar). Industries expected to hire gig workers in the next 2 to 5 years include services, technology and BPO, manufacturing, BFSI, and FMCG, according to an India Brand Equity Foundation (IBEF) report. As the gig economy continues to expand, these segments will require customized financial services to meet their needs. Fintech companies will play a critical role in helping them meet their core needs. Areas where these services begin to overlap include:

1. Social Security

The government can work with businesses and startups to develop strategies to support gig workers and ensure they are treated fairly in terms of minimum wages, (employer-sponsored) social security and other related benefits. Recently, the National Health Authority (NHA) announced its intention to extend the Ayushman Bharat - Pradhan Mantri - Jan Arogya Yojana (AB-PM-JAY) programme to gig workers. Some new-age startups have begun to consider income protection policies (IPPs) to ensure that gig workers are adequately compensated in the event of emergencies such as illness, accident, or other significant financial obligations.‍

2. Credit Access and Credit Rating System

Today, there are many biases regarding access to credit for gig workers due to their "temporary" status. While gig work is seen as something brief, the end use of the income is anything but that. According to a report by Gig Pulse, 60% of gig workers are motivated to support their families as sole breadwinners. While 37% of gig workers are married, about 52% feel the need to earn respect and secure their family's future. Interestingly, a lot of data is in favour of gig workers, including the average age of 27 and the average monthly income of INR 18,000 (between 1,800 and 52,000 rupees). 25% of gig workers surveyed reported that their monthly income increased by 50% compared to their previous lifestyle. In the last year, payouts to gig workers increased by 150%.

The lending opportunity in the gig economy is estimated at $100-125 billion (unsecured loans). Some interesting startups are already operating in this space, including Karmalife, Refyne, Shubh Loans, etc. Crowdsourced micro-lending platforms like RangDe offer a novel business model through their NGO partners and a social angle. Overall, these platforms typically offer short-term, unsecured loans of small amounts ($100-$500) based on monthly wages earned. Their business model revolves around B2B2C and their underwriting revolves around labour data, wages earned, and social data. To date, more than $100 million has been invested in this space. Given the profile of these borrowers, regulators (with appropriate controls) may classify unsecured loans to first-time borrowers participating in the platform economy as "Priority Sector Lending" to promote this cause.

3. Personal Finance & Taxation

Commercial gig workers often rely on project-based payments and may not have fixed pay-out intervals. Industries such as services, technology and BPO, creative projects, etc., are often paid on a project-by-project basis. Hence, there is a need for better financial planning to meet their short and medium-term goals. Workers at the lower end of the pay spectrum need financial education to plan goals and weather emergencies. Taxation is another important area that needs attention given the multitude of small payments from local or global clients, tax deductions at source, refund claims, offline cash payments, etc. One such startup in this area is Shubh Loan, which offers investment plans (starting at 100 rupees per month) and tax filing solutions for gig workers.

4. Payments, Cross-border payments & Forex

Platforms like Upwork, Fiverr, Freelancer, Airbnb, and others often act like intermediaries when receiving international payments for local services. Gig workers may need specialized services to break the commission charged by intermediaries and to hedge their foreign exchange risks, especially when small amounts are involved. In India, UPI is a classic example of a payment solution for a large number of unorganized gig workers.

5. Insurance – Health, Vehicle, Life, Cybersecurity frauds

Insurance in a phygital environment has become an important requirement for gig workers. Health insurance, car insurance, and cybersecurity insurance (as in cryptocurrencies and Web 3 platforms) are critical and will increase in importance as this workforce grows. Embedded insurance based on a pay-per-use model may be the way forward for this segment.


As more and more data swells around this segment (which did not even exist with offices before), many new opportunities will emerge. Digital identities and income data will open up new opportunities in banking (savings and investments), secured credit (affordable housing), retail (no such platform), and housing (28% of migrants).

While the gig economy represents a huge opportunity in India, it currently accounts for just 1.5% of the total workforce. Government, startups, and other stakeholders must work together today to create a sustainable ecosystem that supports gig workers and enables them to thrive.


How Merisis can help - Contact Us

Fintech companies are expected to play a vital role in increasing financial inclusion and digital adoption. The total addressable market for Indian fintech industry is expected to reach $2.1 Tn by 2030, with a CAGR of 18% from 2022. India has seen a significant rise in fintech investment, with about $35 billion invested across segments so far. The years 2021 and 2022 saw more than $19 billion of fintech funding and an addition of 18 fintech unicorns.  Capitalizing on strong demographics, increasing digital adoption, maturing data ecosystem & infrastructure, and product expansion will help fintech companies accelerate financial inclusion within the regulatory guardrails.

The Fintech team at Merisis strives to identify trends early on and assist companies in the identified sub-segments with their growth plans. The team has extensive experience in fundraising and M&A transactions across the FinTech landscape having worked with companies in payments, distribution, lending, wealth tech and insurtech space. Read more

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  • Anuj Mehta

    Director - Fintech & Financial Services