Decoding India’s Credit Growth: What’s Changing in Recent Years?

The rise of India’s credit culture is one of the signs that the country is growing and the net GDP figure of the country. The country is growing at the fastest rate, and therefore, the rise in credit growth shows that internal consumption is taking place, which is a part of the growing economy.

The real reason for this growth is the role of the banks and the new fintech companies, which are introducing new financial products to facilitate the purchase and consumption of the middle class. The rise in the use of credit cards, consumer durable loans, and personal loans are some of the reasons for the growth in the credit industry.

In the credit market, loan DSA partners and other agents are now available to help people get credit cards and loans, which further facilitates the credit industry.

The Rise in India’s Credit Industry

The rise of India’s credit industry is happening due to the change in the consumer landscape. The demographic of the country is quite young and these are the new people who are going into the workforce.

For those individuals, one of the key patterns is the growth in the economy, and that encourages them to consume more and indulge in the majority of things. These expenditures are happening majorly through credit cards and loans as these individuals are confident with their regular stream of income and thus can finance these expenditures through their monthly salary.

How the Adoption of Credit Cards is Happening in India

The role of the credit card is such that it allows an individual leeway to pay back the total bill amount after a certain time. It gives the individual room to pay back after a certain time. In India, the rise of credit card adoption is happening due to the new customers who are more inclined to pay something with credit, and also the reward points which entice customers to have the advantage of those reward points which reduce the price of the product.

Credit card transactions are something that has risen in value throughout the years. As of May 2024, the total number of credit cards which is in circulation is 103 million, and that can be an 18% increase from the same month of last year.

Buy Now Pay Later: A Scheme to Delay the Payments

The next thing that is bringing change in the credit industry of the country is the rise of the buy now pay later scheme. The BNPL option allows a customer to convert each transaction into EMI, and that eases the payout process of the customers.

These BNPL offers let the customers make big purchases, which enables them to take charge of the system. The final offer is that when it comes to BNPL, the danger of this service is that one can fall into the constant traps of EMI, and through that, they need to make all the possible changes to reduce that debt and take control of the finances.

BNPL is getting more popular because it doesn’t require a previous credit card score, which is needed to get future cards. When it comes to this service, more people from Tier 2 and Tier 3 cities are taking the BNPL option. It gives them 15 to 45 days period to pay back the EMI and finance those purchases.

It has helped people to have a credit score, which allows them to finance purchases and get a credit score, which later allows an individual to take credit cards.

EMIs on Credit Cards

The next thing that needs to be considered is the EMI options, which credit cards help people to take. In a credit card, one can convert one purchase into an EMI and then pay the bill partly, which reduces the total payable amount.

One can find the best app for DSA and agents who can help an individual get a credit card with a higher limit based on their preference and the lender who can provide such activity.

The Disruption of the Fintech Players in the Traditional Financial Space

The last players who are behind the rise of the credit industry are the fintech companies which are behind the disruption in the industry.

These are some of the major reasons why we witness the rise in the credit industry and that is fast pacing the consumption in the country.