No-Cost EMIs BREAKING LIQUIDITY BARRIERS

A no-cost EMI is ideal for those urgently needing a product but lacking liquidity

Premiumization is gaining traction in India. A young population with rising aspirations, growing urbanization, changing lifestyles, and a willingness to leverage - that is, take a loan to fulfill one's desires - are leading to an increase in demand for premium products.

Retailers, merchants and e-commerce platforms are capitalizing on this changing trend by partnering with financiers such as banks to provide consumers access to finance, enabling them to fulfill their desires and even upgrade to higher-value products.

While sales of entry-level mobile phones and laptops in India have been declining, those of high-end mobile phones and laptops among retail consumers have been on the rise.

Experts believe that one of the key reasons for such divergent trends is access to finance, empowering retail customers to purchase high-value aspirational products that might be beyond their reach if upfront full payments were required.

While the financing option is definitely aiding sales of premium products, it is also encouraging consumers across the spectrum to buy products they would have otherwise avoided if the full payment had to be made at the time of purchase.

Among the available financing options, no-cost EMIs stand out, especially during the festive season when shopping is at its peak.

WHAT IS A NO-COST EMI

A no-cost EMI is a payment option offered by merchants, retailers or e-commerce platforms in collaboration with financiers or lending institutions. In this arrangement, no interest is payable on the customer's borrowing which essentially covers the product price. The repayment tenure can range from three months and twenty-four months in equated monthly installments (EMIS).