Borrowing Trends Shift Toward Consumer Durables, Entrepreneurship, and Home Investments as India’s Lower Middle Class Embraces Economic Growth
Rise in Technology-Driven Loans for Smartphones and Home Appliances
The demand for smartphones and home appliances skyrocketed. Loans jumped from 1% in 2020 to 26% in 2021 and reached 53% in 2022. This surge reflects India’s growing need for digital devices due to remote work, online education, and the increasing importance of connectivity in daily life. As India undergoes rapid digital transformation, technology-driven borrowing continues to rise. Consumer Borrowing for Smartphones.
Changing Borrowing Habits Among India’s Lower Middle Class
In the past six years, India’s lower middle-class borrowers have shifted their focus from survival needs to long-term investments and aspirations. Easier access to credit and digital platforms has empowered this segment to improve their quality of life. Consumer Borrowing for Smartphones.
Entrepreneurial Loans on the Rise Amid Economic Shift
Entrepreneurial loans surged, rising from 5% in 2020 to 28% in 2021. It is driven by the need for new income sources during the pandemic. Although business loans dipped to 14% in 2022, they recovered to 19% and 21% in the following years. It shows sustained entrepreneurial interest, partly fueled by government support for MSMEs.
Growing Demand for Home Renovation and Ownership Loan
Borrowing for home renovation and construction steadily increased from 9% in 2022 to 15% by 2024. This reflects rising aspirations for home ownership and better living conditions as consumers focus more on long-term investments in housing.
Decline in Emergency Borrowing for Medical Needs
Loans for medical emergencies, once a major reason for borrowing, fell from 7% in 2020 to 3% by 2023 and 2024. This decline suggests better financial planning, improved healthcare access, and wider availability of insurance coverage, reducing the need for emergency loans.
Increasing Prevalence of Online Shopping
After peaking at 69% in 2021 during the height of the pandemic, online shopping usage has shown a steady decline as physical stores reopened. The figure dropped to 56% in 2022 and further to 48% in 2023, reflecting a return to traditional shopping habits. However, in 2024, online shopping rebounded slightly to 53%, signaling its lasting relevance in consumer behaviour. While the urgency of pandemic-driven online shopping has lessened, the convenience and accessibility of e-commerce continue to attract modern shoppers. reportsrecords
