Key Points
However, brands said they may have to forsake some of their margin if the cost of borrowing goes up for such consumer loans - especially for no-cost EMIs whose interest cost they either bear alone or with retailers - after the Reserve Bank of India increased the risk weight on consumer credit including credit card receivables and bank loans to NBFCs by a fourth...
The share of EMI-based purchases has gone up by 5-7 percentage points for electronic products such as televisions, refrigerators, and smartphones this year - the highest growth rate in at least five years - as brands rolled out such schemes even for entry-level products and in small stores, industry executives and market researchers said...
For smartphones, market tracker Counterpoint Research said the share of such transactions now accounts for 33% of all transactions, up from 28% last year, with brands offering no-cost EMI schemes for 10,000-plus smartphones this year as compared to the usual 20,000-plus...
Purchases on credit, especially no-cost EMIs, have already become a habit for Indian consumers for they can maintain their wallet liquidity, buy more premium, upgrade more often, and also since their monthly expenses have gone up due to inflation which is still more than what it was two years back, executives said...
Credit availability also has been easy with fintechs and NBFCs also being active, Bali said.. Rajeev Singh, partner and consumer industry leader at Deloitte Asia Pacific, said the average saving percentage in India - which used to be 24-25% in pre-Covid years - had inched up a bit during the pandemic but has now fallen by 7-8 percentage points..
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