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[The Outline By Inc42 Plus] The BNPL Diwali

[The Outline By Inc42 Plus] The BNPL Diwali

India's BNPL segment is on fire in the festive season amid ecommerce sales but there is a flipside to this growth too

Dear reader,

In pretty much every neighbourhood in India, there’s that one shop which has a ‘no credit’ sign hanging, politely reminding customers to not ask. Although larger stores might have a monthly credit system for the regulars, the smaller shops almost always turn away those seeking ‘udhaar’ or credit for purchases.

These days, though, a smartphone is pretty much all that you need to get past this barrier. With digital payments more widely accepted, a new avatar of credit has emerged in the form of buy now pay later or BNPL.

From fintech startups, ecommerce giants, NBFCs to banks — everyone has jumped on to the BNPL bandwagon and it’s easy to see why. India’s low organised credit penetration means that not many consumers or businesses have credit histories and this leaves them out of the traditional lending umbrella.