Why More Indians Are Borrowing From Family Instead Of BNPL Apps

Most Indians are now going back to old ways. Asking family, instead of clicking ‘Pay Later’ on an app.

More people are skipping Pay Later buttons and going back to what they trust, their own people.

Your salary’s late. Phone bill due. Would you open a lending app or ask your cousin for a quick ₹5,000? More and more are choosing the second.

The NABARD Rural Economic Conditions and Sentiments Report (July 2025) found that 47.4% of rural households are using informal or mixed borrowing. That means money from relatives, neighbours, or local shops. Not banks. Not apps.

At the same time, a LiveMint report from 2025 showed only 15% of salaried and 18% of self-employed Indians used Buy Now Pay Later (BNPL).

People trust people more. And it seems, old habits are making a slow return.

What Does Family Assistance Really Mean in Daily Borrowing? 

Family help sounds simple. No forms, no app glitches. Just a call, a word, and money arrives. As per the IEG Household Borrowing Report (Jan–Apr 2023), 53% of Indian households had taken loans. Out of informal sources, 12.7% went to friends or family directly.

Here’s where informal loans came from that year:
 

People borrow where they feel less judged. Not always where it’s cheaper.

What Links This To Past Lending Behaviour? Look Back To Understand What Changed

In October 2024, LoansJagat had run a warning piece titled “How Social Media Is Pushing Young Indians Into Personal Loans”. It pointed at flashy BNPL ads, targeting young earners who didn’t check the fine print.

Some lost job offers due to poor credit scores. That hit hard.

Now? There’s a slow pause. A return to careful borrowing.
 

The change isn’t loud. But it’s steady.

How Did Banks and Government Respond Before? Compare Actions With Today’s Shift

Way back in 2019, the AIDIS Survey showed that rural homes relied more on informal loans. But banks were chasing credit card users and BNPL leads.

Later in 2021–22, banks offered EMI deals during Diwali sales. BNPL grew fast.

But by 2023, RBI stepped in. New rules made digital lending tougher. People noticed. Some stepped back. In NABARD’s 2025 report, 30% of informal loans carried no interest at all, mostly from family.

Here’s a look at borrowing patterns now:
 

Sometimes help doesn’t come with paperwork. It comes with trust and tea.

Conclusion 

Families are stepping in again. Apps are still around, but they're no longer the first call. For many, money isn’t just numbers. It’s personal.

This isn’t a sudden turn. It never left. Just got quiet for a while.

Now it’s back, family help over BNPL loans. And maybe, for a lot of people, that’s the safer route.