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The rise of pay later phenomenon in India

Good Morning,

In a country like India, where finance is quite fragmented, hard to access, and inundated with processes and paperwork, BNPL (buy now pay later) positions itself as a hassle-free, ready-to-use product — and it has been well-received, especially in lower-tier cities and rural areas, where formal financing is no better than a pipedream.

These are small-ticket loans that power online and offline purchases mostly via apps that function much like a Paytm or a PhonePe when it comes to making instant payments. 

Several startups, including LazyPay, Simpl, ZestMoney, and ePayLater, operating in this space have, essentially, changed the way credit works in India.

Image credit: YourStory

In the last 18 months, online shopping has seen a spike, mostly from lower-tier cities as people took to the internet to order groceries, other essentials, clothes, utility items, and more amid the pandemic.

On the flipside, layoffs, a tight employment market, salary cuts, and suspension of increments has added to people’s cost of living expenses —  forcing them to consider credit options to stave some of the financial pressure off.

All this has resulted in strong demand for credit and BNPL players have been able to capture a lot of that market. Seeing the success, even traditional banks and ecommerce companies have launched their own BNPL plays.  Read more.

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News & Updates

Before you go, stay inspired with… 

Lizzie Chapman

“We don’t believe that people need to go to banks and take out heavy loans to finance their purchases. These can be financed instantly, at the checkout, using technology and data intelligence. This is exactly what we have envisioned to build ZestMoney.”

Lizzie Chapman, CEO, ZestMoney

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