Living expenses are biting a few too, as 12% of study participants said that they are resorting to borrowing simply to cover basic needs, pointing to a fragile financial state. Apart from this, most of these consumers borrow for a variety of end uses.
“They borrow to buy appliances and utilities like refrigerators, coolers, TVs, mobiles, home improvement and business reasons. They also borrow for experiences like travel etc.,” Tiwari adds.
While the lower middle class saves in cash, it does not mean they do not embrace the digital way of life. As per the study findings, 63% of consumers believe digital tools have made it easier to pursue their financial goals, with the strongest confidence coming from tier-1 cities like Jaipur (86%), Pune, and Kolkata (80%).
Even as physical stores remain dominant for apparel and home appliances purchases, online channels are rapidly gaining traction. Online retail payments now account for 51% of transactions (up from 42% in 2024). More importantly, preference for online loan applications is nearing parity with offline at 50%, demonstrating growing trust in digital lenders.
UPI continues to remain popular with around 80% of consumers now relying on the platform for everyday transactions, as compared to 72% in 2024. Adoption is highest among men, Gen Z, and metro dwellers—especially in Hyderabad (93%) and Kolkata (87%).
But, as always there is a catch—nearly half of people say they might stop using UPI if fees are introduced. After all, for those who save in cash, and hold money tightly, the convenience of a payment is not worth the fees.