ZestMoney, India's first and largest AI-driven consumer lending platform today revealed that the platform has observed over 125 per cent growth in EMI financing in 2019.
Witnessing a 2000 per cent increase in new-to-credit customers from tier-two and tier-three cities, digital EMIs make up a huge chunk of today's economy.
EMI financing has led to substantial growth in online sales over the past year for e-commerce giants such as Amazon, Flipkart, Myntra, Paytm, MakeMyTrip, Decathlon, among others. EMI adoption grew by over 84 per cent in tier-one cities, 140 per cent in tier-two cities and 145 per cent in tier-three cities in 2019.
"Cash dominance is reducing and EMI adoption is on the rise leading to a healthy financial ecosystem that is driving business growth for many new-age companies. The purchasing powers are witnessing a boost and Indian consumers are spending more than ever using EMI financing," Lizzie Chapman, ZestMoney's CEO and co-founder.
"This is no longer a country where people rely on their savings, but a nation where the people want the best they can afford. I believe that 2020 will be a year in history for EMI adoption and growth of financial independence among Indians," added Chapman.
Indian buyers are no longer held back by the amount of in-hand cash when it comes to purchasing the best. Though India has been a cash economy for ages, digital payments and financing are quickly becoming popular.
With the growth of e-commerce in India, a huge range of items are available to the masses. Everything from smartphones, computers, apparel, groceries, appliances, travel tickets and even hotel rooms and complete houses on rent, you can pretty much get anything online.
Brands are acquiring a foothold in the Indian market with lucrative deals on products and services that even in a slow economy, are leading consumers to spend more.
Myntra, one of the biggest fashion and apparel e-commerce organizations of India provides a range of digital EMI options to buyers, including no-cost EMIs. Encouraging the customers to spend more on premium products, without disturbing their monthly finances.
Saving up was the trend earlier, but today the consumers are keener on buying first and paying later. With the help of digital EMIs, consumers are buying products that were out of their reach.
By repaying with an EMI plan that suits them the best, they can easily manage their finances and not compromise with their aspirations.
As Indian consumers get used to the idea of short-term debt, they are reaching out for products that are twice or thrice the price, all because they can pay with affordable instalments.
Digitization of financial services has placed them right at the fingertips of the average Indian consumer. With the power of fintech and the Internet, anyone can finance a purchase within seconds. ZestMoney's average time of approval for an EMI is 12 seconds, and 50 per cent of their customers make a second purchase within the next six months.
The company serves customers in every single Indian state and union territory, including 17,924 pin codes and 694 out of 736 districts. According to ZestMoney, the average Indian consumer is a 31-year-old, who has no access to easy credit but is connected to the internet.
Four out of five customers are from a tier-two or three cities and are driving the growth of EMI financing in the country.
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