Personal finance is an important aspect of one’s life, as it affects one’s goals, aspirations, and well-being. In India, the personal finance space is evolving rapidly, with new products, services, and trends emerging every year.
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Here are some of the top personal finance trends to watch out for in 2024:
1. Buy Now Pay Later (BNPL)
This is a new form of credit that allows consumers to purchase goods or services and pay for them later in installments, without any interest or fees. BNPL is gaining popularity among Indian consumers, especially the younger generation, as it offers convenience, flexibility, and affordability. According to a report by Navi, BNPL is expected to grow at a compound annual growth rate (CAGR) of 40% in India by 2025.
2. Exchange-Traded Funds (ETFs)
These are funds that track the performance of an index, sector, commodity, or asset, and can be traded on the stock exchange like shares. ETFs offer low-cost, diversified, and passive investing options for investors who want to benefit from the market movements without actively managing their portfolio. ETFs are becoming more popular in India, as they offer exposure to various segments of the economy, such as gold, banking, IT, etc. According to the Association of Mutual Funds in India, the assets under management (AUM) of ETFs in India grew by 76% in 2021, reaching ₹3.35 lakh crore.
Additional Read: What is a Bond ETF?
3. Neobanks
These are digital-only banks that operate without any physical branches or infrastructure, and offer banking services through mobile apps or web platforms. Neobanks are disrupting the traditional banking landscape, as they offer faster, cheaper, and more convenient services to customers, such as instant account opening, zero balance accounts, free ATM withdrawals, etc. Neobanks are also catering to the underserved segments of the society, such as freelancers, gig workers, small businesses, etc., by providing them with customised solutions.
4. Cryptocurrency
This is a digital or virtual currency that uses cryptography to secure its transactions and prevent counterfeiting. Cryptocurrency is a form of decentralised money that operates independently of any central authority or intermediary. Cryptocurrency is attracting a lot of interest and investment from Indian users, as it offers an alternative asset class, a hedge against inflation, and a potential source of income. According to a report by [Chainalysis], India ranked second in the world in terms of crypto adoption in 2021, with over 10 crore users and over ₹40,000 crore worth of transactions.
5. Peer-to-Peer (P2P) Lending
This is a form of lending that connects borrowers and lenders directly, without any intermediaries such as banks or NBFCs. P2P lending platforms use technology and data to assess the creditworthiness of borrowers and offer them loans at competitive interest rates. P2P lending is emerging as a viable option for both borrowers and lenders, as it offers access to credit, higher returns, and lower risks. According to a report by PwC, the P2P lending market in India is expected to grow at a CAGR of 50% and reach $5 billion by 2023.
Wrapping Up
These are some of the personal finance trends that are shaping the future of money in India. As consumers become more aware, savvy, and empowered, they will seek more innovative, convenient, and rewarding ways to manage their finances. The personal finance space in India is poised for a transformation, and the opportunities are immense for both users and providers.