Fintech firms are piloting instant loan products and expanding the scope of their digital equated monthly instalment (EMI) products at offline stores, because of the increasing demand for credit. Digital EMI, or ‘Buy Now Pay Later’ credit products, were widely offered offline through electronic and white-good stores. Bajaj Finserv Ltd, a pioneer in this model is now seeing traction in newer segments such as auto dealers, fashion retail stores, restaurants, and small-town traders, with banks more comfortable with small loans. Banks deployed debit card-based EMIs as metro purchasers went to their homelands. Smaller cities are also preparing to offer these credit facilities. Retail brands have also joined banks and are willing to offer buyers credit for purchases, absorbing the interest rates on zero-cost EMIs.
Rajeev Agrawal, Founder and Chief Executive Officer (CEO) of enterprise payments solutions provider Innoviti had commented that adversely to the aspirational upper-middle-class customers, which would take EMIs at offline purchase points to boost their buy, there is a new category of ‘need-based’ customers coming now, as COVID-19 and work-from-home has increased the dependence on electronics. Accordingly paying for purchases in instalments has found more viability. EMI based purchases were increased by 30% this October compared to the same period last year, for Pine Labs, which is said to have a huge share among fintech in the offline EMI market.
Kush Mehra, chief business officer, Pine Labs mentioned that with COVID-19, the need for electronics, smartphones, and white goods has shot up, leading to a 50% increase in average basket sizes. Consumers are buying more on EMIs and trying not to spend it all at once.
Over the past year, Pine Labs had also launched products such as Instant EMI for smaller ticket sizes, which allow users to scan the company’s QR code at merchant locations and avail quick credit for basket sizes above ₹5,000. Pine Labs challenger Mswipe joined the rush and launched its digital EMI platform in October after piloting it for nearly two years. The EMI platform of Mswipe’s takes a brand-centric marketplace approach and permits brands to push offers at its offline merchant network and give customers zero-cost EMIs, to push inventory faster at offline retail points.
