Borrowing to survive: 93% of India's under ₹50K earners turn to cards, BNPL

Business Standard

16-07-2025

A new study by Think360.ai, a CAMS company, reveals a significant shift in how India's low-income earners borrow and manage cash flow. Based on behavioral data from over 20,000 borrowers, the research shows that
A whopping 93% of salaried individuals earning under ₹50,000 per month now rely on credit cards, with a growing number turning to Buy Now, Pay Later (BNPL) products to manage daily expenses and working capital needs, as per a new study by Think360.ai, a CAMS company.
Based on behavioral data from over 20,000 borrowers, the research shows that credit cards have now become essential tools for short-term liquidity among India's underserved segments. Among the self-employed earning under ₹50,000/month, 85% use credit cards, while BNPL usage is also significant—18% among the self-employed and 15% among salaried users.
This shift is especially evident among those earning below ₹25,000/month, many of whom are New-to-Credit (NTC) or Existing-to-Credit (ETC) borrowers. These groups often juggle multiple loans, making them more vulnerable to defaults and late payments.
'Credit cards and BNPL are no longer aspirational luxuries—they've become financial necessities,' said Amit Das, CEO of Think360.ai. 'We must use alternative data and AI to responsibly expand access to credit while managing risk.'
Further, 74% of individuals earning under ₹20,000 take multiple loans to manage their needs, often leading to higher EMI defaults and increasing their lending risk profiles. The Think360.ai Lending Risk Score shows that 35% of self-employed and 25% of salaried borrowers fall into the high-risk category, demanding smarter credit evaluation techniques. These behaviors are deeply tied to India's evolving digital credit ecosystem.
Key Findings from the Study:
60%+ rely on personal and gold loans.
Only 28% of self-employed individuals invest, versus 75% of salaried individuals.
Insurance penetration: 71% (salaried) vs. 47% (self-employed).
UPI adoption is near-universal: 89% (salaried), 92% (self-employed).
Self-employed individuals are more likely to hold multiple loan accounts and use a mix of secured and unsecured credit options.
As a result, traditional credit scoring models may fall short in assessing these consumers. Think360.ai emphasizes the need for AI-based risk models that incorporate alternate data such as UPI history, mobile usage, GST filings, and digital payment patterns.
India's fintech sector disbursed over ₹92,000 crore in personal loans in FY23, accounting for 76% of all new loan originations by volume. Many of these are small-ticket loans averaging ₹10,000, especially targeted at borrowers without a formal credit history.
If you're a low-to-moderate income earner using digital credit tools, it's crucial to: