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Borrowing to survive: 93% of India's under ₹50K earners turn to cards, BNPL
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.
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The Hindu
16 minutes ago
- The Hindu
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Trade pact, UPI and more: How PM Modi's visit will reset ties with Maldives
India and Maldives are looking to reset ties as Prime Minister Narendra Modi heads to Male today (July 25). Modi's trip comes on the invitation of President Mohamed Muizzu. But what do we know about the PM's two-day trip? What can we expect? read more India and Maldives are looking to reset ties. The development comes as Prime Minister Narendra Modi heads to the Maldives today (July 25) after a trip the UK. India and the UK signed a landmark free trade agreement in the backdrop of Modi's visit. Modi's trip to Maldives is his first since the new Mohamed Muizzu administration took charge in November 2023. But what do we know about Modi's trip? And what can we expect from it? STORY CONTINUES BELOW THIS AD Let's take a closer look: What do we know about the trip? Modi will be in Maldives today (July 25) and tomorrow (July 26). Modi will be the guest of honour as Maldives celebrates the 60th anniversary of its independence. Modi's trip also comes as India and Maldives mark six decades since the establishment of diplomatic relations. It is Modi's third visit to the island nation since coming to power in 2014. India was among the first to recognise the Maldives and establish diplomatic relations after it gained independence in 1965. The prime minister will hold a bilateral meeting with President Muizzu. Prime Minister Narendra Modi's trip comes after India and the UK signed a landmark free trade agreement. Image courtesy: X His trip is the first state visit Muizzu is hosting since taking power in late 2023. He will also meet other senior political leaders. Modi is also set to inaugurate some infrastructure projects. 'I will join the celebrations marking the 60th anniversary of the Independence of Maldives. This year also marks the 60th anniversary of the establishment of diplomatic relations between our two countries. 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The two countries are likely to announce steps to combat drug trafficking in the Indian Ocean and Arabian Sea. STORY CONTINUES BELOW THIS AD This includes stepping up cooperating in defence and maritime security including sharing of intelligence. Muizzu has described drugs as a national scourge and vowed to make rooting it out a priority in his administration. A number of MoUs on infrastructure and capacity building that will deepen cooperation and economic ties are also likely to be signed. Step to mend relations Modi's visit is yet another step towards resetting relations between the two countries. Muizzu, who is known to be pro-China, came to power on an 'India Out' campaign. Muizzu, remember, had demanded that Indian military personnel in the Maldives leave the island. Modi, regardless, was the first world leader to congratulate Muizzu on his victory. 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'Our recent assistance has improved the foreign exchange position of the Maldives, which has been cited by international financial organisations, including the IMF, as a positive factor that has helped the Maldives avoid difficult outcomes. My understanding is that the $400 million swap line has been almost completely utilised, and now the 30 billion rupee Indian swap line might also be drawn upon," Misri added. New Delhi is also financing several projects in Male via concessional credit and buyer's credit facilities. This includes the Greater Malé Connectivity Project, which will link four islands. India in May 2024 had announced that it would let a $50 million loan roll over. This came after US ratings agency Fitch downgraded Maldives' credit rating to 'junk' status. India over the years has provided the Maldives' with over a billion dollars in assistance. STORY CONTINUES BELOW THIS AD Muizzu himself acknowledged India's role during his visit last year. 'India is a key partner in the socio-economic and infrastructure development of the Maldives, and has stood by the Maldives during our times of need.' Former Maldives president Mohamed Nasheed said, 'Maldives is positioned across some of the most navigable waters of the region of the Indian Ocean. It stretches 1,000 kilometres from north to south and another 600 kilometres from east to west. Prime Minister Modi's visit to the Maldives reaffirms the strategic importance India places on its long-standing relationship with us'. The Federation of Indian Export Organisations (FIEO) said on Wednesday that Prime Minister Narendra Modi's visit to the United Kingdom and the Maldives will boost Indian exports and promote regional stability in the Indian Ocean region. FIEO president SC Ralhan said that this visit comes at a pivotal moment of Comprehensive Free Trade Agreement (FTA) negotiations reaching the final stages. With inputs from agencies STORY CONTINUES BELOW THIS AD
