By BW CFO World Online Bureau
Non-metro cities lead the way with 59 per cent of total EMI volumes. Jottings from a digital Payment lender indicates a growing city-wise trend.
With severe disruptions caused by the pandemic, retail consumption across India has been significantly impacted. Due to this, the customers either avoid single bulk payments for higher-priced products or altogether shy away from purchasing them.
Ezetap, a digital payments leader, recorded a steep increase of 220 per cent (year-on-year) in the transactional volume of Equated Monthly Installments (EMI) in July 2021 as compared to February 2020. EMI volume as part of total transactions has increased to 18 per cent, in the mobile and consumer durables segment, as compared to 9 per cent in the pre-pandemic period of March 2020.
Delhi was the leading metro city with an increase of 258 per cent in total EMI volume followed by Bengaluru clocking a growth of 206 per cent as compared to February 2020. The data also indicates that there has been a significant increase in the adoption of EMI transactions in non-metro cities with a combined contribution of 59 per cent in the total EMI volumes. Ahmedabad and Pune registered growth figures of 230 per cent and 210 per cent, respectively. This shows that affordability solutions play a positive role in impacting sales across product categories, not only in the metro cities but also across Tier 2 and 3 cities. This may be partially attributed to the fact that a large portion of the working population have moved back to their hometowns due to work from home models, and have contributed to EMI sales in their respective hometowns.
A major reason for the steep increase in total EMI transaction volume has been a surge in debit card EMIs. According to the data, Debit card EMIs have shown significant growth with nearly 25 per cent contribution in the total EMI volumes. As per Reserve Bank of India (RBI) data for March 2021, there were 898.2 million debit cards in India as compared to 62 million credit cards. Earlier, EMIs were available only on credit cards, which have limited penetration in non-metro cities in the country. However, with EMIs being offered on debit cards, even the customers from tier-2 and tier-3 cities can now benefit from this affordability option.
The data claims that another factor for the large-scale uptake of EMIs could be the no-cost EMI offers and vouchers extended to customers by various brands.