India’s millennials – what a shock – are borrowing for consumables.
This is a massive generational shift in India where previous generations believed in first saving and then buying – even if it took years or ultimately going without.
Consumer credit companies such as TVS Credit and Bajaj Finserv have been increasing the share of their offerings to these niche segments not covered by conventional lenders and NBFCs.
The loans are known as EMI’s (equated monthly instalments) and are used to buy various goods, including mobile phones, consumer durables and small-ticket items on easy, no-cost EMIs via loans or credit cards.
It is the segment of youthful, low-income but tech-savvy consumers that fintech lenders are targeting – half the small loans are of Rs5,000 or less.
The country’s largest AI-enabled consumer lending platform, ZestMoney, noted in a report that it had seen more than 125% growth in EMI funding.
E-commerce majors such as Amazon, Myntra, Flipkart, MakeMyTrip, Decathlon and Paytm, among others, have seen a substantial surge in online sales in the past year due to EMI financing schemes – and digital payments mean no cash.
The New India is not afraid of debt – signalling a major uplift in consumer demand for decades to come.
Author: Stephen Manallack
Former President, Australia India Business Council, Victoria and Author, You Can Communicate; Riding the Elephant; Soft Skills for a Flat World (published by Tata McGraw-Hill INDIA); Communicating Your Personal Brand.
Director, EastWest Academy Pty Ltd and Trainer/Speaker/Mentor in Leadership, Communication and Cross Cultural Communication.
Passionate campaigner for closer western relations with India.
Stephen Manallack is a specialist on “Doing Business with India” and advisor/trainer on “Cross-Cultural Understanding”. He is a Director of EastWest Academy Pty Ltd which provides strategic advice and counsel regarding business relations with India.
A regular speaker in India on leadership and global communication, his most recent speaking tour included a speech to students of the elite Indian university, Amity University, in Noida. He also spoke at a major Federation of Indian Chambers of Commerce and Industry (FICCI) global summit, the PR Consultants Association of India in Delhi, the Symbiosis University in Pune and Cross-Cultural Training for Sundaram Business Services in Chennai. He has visited India on business missions on 10 occasions and led three major trade missions there. He provides cross-cultural training – Asia and the west.
View all posts by Stephen Manallack