Do it yourself

My relationship manager at a private bank recently offered me a “metal card”; claiming it to be the most premium credit card available in India. I learnt that though globally the metal cards have been in vogue for two decades, these have become popular in India only in the past couple of years. Of course, I did not meet the eligibility criteria for the card, and also, I found it to be too ‘elite’ for my spending profile. But this is not the point here. For the past many decades, I have been used to referring to the modern consumer credit ecosystem as ‘plastic money’. My wallet and table drawer are full with a variety of plastic cards- credit, loyalty, identity, membership, insurance, travel, etc. I considered myself privileged with so much “plastic” in my possession. Suddenly, one phone call from a 28-year-old bank executive shattered my ‘illusion’, and apprised me how underprivileged I am for being part of ‘plastic’ economy, when the elites have already moved to the stronger ‘metal’...

Household now largest borrowers As per the latest data released by the Reserve Bank of India, the share of personal loans in total outstanding bank credit in India has grown to 27%. For the first time, the share of personal credit in the total bank credit is higher than the credit to the industry.  In past 12 months, the share of personal credit has increased by 2%, from 25% in September 2020 to 27% in September 2021; whereas the share of industrial credit has declined by 1% from 27% to 26% over the same period. The share of credit to agriculture sector has remained mostly stagnant at around 12%. The trend could be explained, inter alia , through the following three key factors: (a)    Rising institutionalization of the personal credit due to accelerating financial inclusion and digitalization of financial transactions. (b)    Decline in share of NBFCs in the personal credit, due to a variety of reasons. (c)     Deleveraging of balance she...

A recent report published by The Indian Private Equity and Venture Capital Association (IVCA) and Ernst & Young (EV) gives a fairly detailed view of Indian Ecommerce and Consumer Internet Sector in India. The report highlights how rapidly this sector has been growing in India in past few years. It also indicates towards the future of business and direction of growth. Obviously, the trend in India are part of a larger global trend and is greatly influenced by the global patterns. The key highlights of the report could be noted as follows: ·          In 2020, E-commerce and Consumer Internet companies raised over US$8 billion in PE / VC capital spread over 400 deals, giving rise to 9 new unicorns. Edtech and hyperlocal segments led the investment activity, together accounting for over 40% of 2020 investments and witnessing 5x and 2x growth in funding value respectively over 2019. Fintech and social commerce continued to witness traction by i...