As the country’s longest festive season kicks off, Indian consumers are planning buy-now-pay-later installment plans to buy everything from washing machines to holidays online.

There is growing popularity for these smaller-sized loans, which typically cost less than Rs 5,000 ($67) as the labor market recovers from the shock of the pandemic. Those payments have been growing at least 20%-30% over the past three months, according to fintech-firm executives. A survey by Research and Markets showed that they are expected to grow by nearly 66% year-on-year in India to $11.6 billion this year.

“Things are very positive, people have got their jobs back,” said Bhavin Patel, co-founder and CEO of the company. lendenclub, a peer-to-peer lending platform. “The buy now, pay later model is the most popular source of borrowing for customers who require small-sized loans to meet immediate cash needs.”

Rising vaccination rates as well as declining coronavirus cases are fueling optimism that people are more willing to spend on accessories and jewelry this year. Those consumers are increasingly turning to installment plans from retailers like e-commerce giant Amazon.com Inc., Flipkart Internet Pvt. Ltd and Ant Group Co backed Paytm, as well as smaller fintech firms such as LendenClub, Straightforward, zestmoney And cache.

Patel said Lenden has seen loan applications triple to 170,000 in February to September and is expected to increase to 250,000 in December.

More broadly, according to a Bank of America Corp report, spending per credit card in August was up 54% compared to a year earlier.

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“BNPL is helped by two things, one being the festive season and the other being Covid-19 as people are becoming more comfortable shopping online,” Yogi Sadana, CEO, fintech lender Cashay said. “We are growing around 30% to 35% on a monthly basis in terms of the number of loans we disburse every month. Pick-up is phenomenal. ”

For fintechs, such loans are filling a sweet spot. They cater to customers who are generally not eligible to borrow from a traditional bank or have to wait longer than to get a loan within a few hours.

“It is a win-win for all three players – borrowers who get loans quickly, lenders who earn 10-12% average returns and we who earn 5-6% fees by getting borrowers and lenders on a common platform. are,” Patel said.

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