MUMBAI — Young Indians are increasingly opting for debt over savings, driven by rising living costs, social media influence, and financial illiteracy, CNA’s Insight finds.

Vaishakh Sudhakaran, once burdened with debts after losing his job and lacking savings, turned to multiple loan apps offering quick and simple credit. He took loans ranging from 5,000 to 30,000 rupees (US$52 to US$314) to cover rent, bills, and family needs.

Business owner Purva Matkar, 28, understands the pressure faced by many young people in similar situations. By June last year, the loan portfolio of fintech-driven non-banking financial companies in India reached 2.1 trillion rupees, with active loans growing 25.6% year on year, according to credit bureau CRIF High Mark.

Travel fintech platform Niyo reported that Millennials and Generation Z accounted for nine out of 10 overseas trips made by Indians last year, highlighting their spending patterns.

Sharva Mane expressed a common sentiment among youth: “If I could just afford a coffee or some drinks with my friends, I’d splurge the 1,000 (rupees) that’s left in my bank account.”

A survey by digital lending platform mPokket found that 63% of young respondents felt more in control of their finances when using credit.

However, Preeti Jha, head of strategic alliances at 1 Finance, emphasized the importance of financial literacy, stating, “There’s a very big difference between people who are here to sell you financial products and … people who are genuinely giving you advice.”

This trend presents a growing challenge for India as digital credit reshapes how young people manage money amid economic pressures.

Sources

CNA Latest News: ‘I don’t want to miss out’: Why India’s youth are choosing debt over savings