Tier-2 cities lead India’s digital credit inclusion, Amazon Pay-backed report finds
Tier-2 cities scored 58.64 on the Digital Credit Inclusion Index, ahead of Tier-1 and Tier-3 markets. Electronics and home appliances account for digital-credit usage for 59% of respondents, highlighting credit’s role in discretionary retail purchases.
What happened
Amazon Pay and Pahlé India Foundation’s DCII 2026 finds Tier-2 cities lead India in digital credit inclusion. Consumer purchases, especially electronics and
Key facts
- National DCII score: 55.85/100
- Tier-2 DCII score: 58.64
- Tier-1 DCII score: 53.1
- Tier-3 DCII score: 55.7
- Survey: 5,000+ respondents across 100 cities in 20 states
- Digital-credit awareness: 94.4%
- Digital-borrowing confidence: 52.5 versus 69.7 for digital payments
- 59% use digital credit for electronics and home appliances
Why this matters
Target partnerships or acquisitions spanning Tier-2 merchant distribution, point-of-sale credit, and consumer-trust capabilities, where lending adoption is proven but confidence and checkout experience remain fragmented.
What to watch
- Tier-2 approval rates and EMI attach rates versus Tier-1, especially for electronics and home appliances.
- 30/60/90-day delinquency trends, credit-line reductions and lender underwriting changes.
- RBI guidance or enforcement affecting digital lending disclosures, first-loss arrangements, BNPL structures or data consent.
- Merchant-funded EMI subsidy levels and whether lenders reduce zero-cost EMI availability.
- Growth in consumer complaints about hidden charges, repayment reminders, failed refunds or credit-score impacts.
- Festival-season credit sales mix, cancellation rates and post-promotion repeat demand in Tier-2 markets.
- Prioritize Tier-2 city clusters for appliance and electronics checkout-finance pilots, using localized merchant, delivery and service coverage.
- Show transparent monthly EMI, total cost, eligibility and approval status before checkout to close the confidence gap between paying digitally and borrowing digitally.
- Create credit-specific assortments: entry-price smartphones, replacement appliances, bundles, extended warranties and exchange offers calibrated to affordable monthly payments.
- Measure incremental conversion, AOV, repeat purchase, return rates, delinquency-linked rejection rates and net merchant margin by city tier and lender.
- Diversify lender and credit-product partnerships so approval rates and promotional economics do not depend on a single BNPL or wallet provider.