📷 Image: Wikimedia Commons / Yann (talk)
Business
India’s Gen Z Turns to Credit, Yet Faces Repayment Hurdles
✍️ Business Standard
🗓 21 Aug 2026, 07:33 AM
👁 1
A Business Standard Datanomics report finds that Indian Gen Z is increasingly using credit products, but many are struggling to meet repayment schedules.
A recent Datanomics analysis published by Business Standard highlights a growing trend among India’s Generation Z: a willingness to take on credit for consumption and lifestyle needs. The study, which examined usage patterns across digital lenders, credit‑card issuers and peer‑to‑peer platforms, shows that young adults are now more comfortable accessing short‑term financing than previous cohorts.
The report notes that the surge is driven by the proliferation of mobile‑first lending apps, easy‑to‑use credit‑card onboarding and aggressive marketing targeting first‑time borrowers. Many Gen Z users cite convenience, instant approval and the ability to bridge cash‑flow gaps as key reasons for adopting credit.
However, the same data reveals a parallel challenge – a sizable portion of these borrowers are falling behind on repayments. Factors such as irregular income streams, limited financial literacy and the temptation of easy credit are cited as contributors to delayed payments and rising delinquency rates.
Industry observers warn that the mismatch between credit uptake and repayment capacity could pressure lenders to tighten underwriting standards. Policymakers are also urged to enhance financial‑education initiatives to help young consumers manage debt responsibly.
The report notes that the surge is driven by the proliferation of mobile‑first lending apps, easy‑to‑use credit‑card onboarding and aggressive marketing targeting first‑time borrowers. Many Gen Z users cite convenience, instant approval and the ability to bridge cash‑flow gaps as key reasons for adopting credit.
However, the same data reveals a parallel challenge – a sizable portion of these borrowers are falling behind on repayments. Factors such as irregular income streams, limited financial literacy and the temptation of easy credit are cited as contributors to delayed payments and rising delinquency rates.
Industry observers warn that the mismatch between credit uptake and repayment capacity could pressure lenders to tighten underwriting standards. Policymakers are also urged to enhance financial‑education initiatives to help young consumers manage debt responsibly.