India's informal BNPL model witnessed a surge in repayments this Diwali season with repayments 12 percent higher than average, and the merchants booked 15 percent growth in their business during the two-week festive season.
The rise in digital payments has led to an increasing trend of timely repayment by customers who mostly resort to the buy-now-pay-later (BNPL) model from their local mom-and-pop shops. As many as 30 lakh customers set their dues on time post-Diwali.
India's informal BNPL model witnessed a surge in repayments this Diwali season with repayments 12 percent higher than average, and the merchants booked 15 percent growth in their business during the two-week festive season, according to a study by digital book-keeping app OkCredit.
Most of these shops usually struggle to get their dues back in time, however, this festive season saw more than 30 lakh customers coming forward to settle their credit. Merchants in eateries, school supplies, travel, jewelry, and Kirana shops saw the highest growth in customers, the study stated.
While the festive season brought cheer to several sections of the economy...it was heartening to see credit recovery being high," said Gaurav Kunwar, Co-founder and Chief Product Officer, OkCredit.
Moreover, the increased repayments and growth in retail SMBs (small and medium businesses) also point to a healthy recovery in the economy, especially tier-2 and tier-3 towns, as these towns account for a significant chunk of OkCredit's merchant base, the study stated.
There has been a 70 percent increase in retail SMBs adopting a digital solution to manage their books, it said, adding out of 35 states and union territories, 25 have seen business growth as compared to the last year.
Others have remained more or less stagnant. Merchants in states such as Kerala and Karnataka have seen 8 percent growth in business. The North-Eastern states have seen the highest growth, topped by Manipur where transactions per merchant increased by 22 percent.