Gen Z’s debt trap: Finfluencers sound alarm on EMIs, credit splurge at BT India@100 Summit

At the Business Today India@100 Summit, a sharp conversation unfolded around Gen Z’s rising consumption habits and the financial pitfalls that could threaten India’s economic momentum. Finfluencers and finance leaders painted a nuanced picture—one that celebrated India’s consumption-driven growth while cautioning against unsustainable spending patterns.

Investment banker and content creator Sarthak Ahuja highlighted some eye-popping stats: “70% of iPhones in India are bought on EMIs. Even more surprising—27% of vacations this year are being financed the same way.” He warned of a growing culture where peer pressure, social media influence, and easy credit have normalized debt-fueled lifestyles.

“India’s at a $3,000 per capita GDP sweet spot,” Ahuja added, “where discretionary spending surges. But without financial discipline, this can backfire.”

Echoing the concern, Mukul Malik of Asset Yogi pointed to rising risk appetite among young Indians. “Trading is booming, but 93% of people lose money in futures and options. There's awareness of new investment avenues, but not enough understanding of risk.”

Sanjay Kathuria, another prominent finfluencer, framed the issue through Adam Smith’s classic pillars of growth: demography, consumption, entrepreneurship, and innovation. While India excels in the first three, he argued, financial awareness is lagging. “People don’t understand the difference between good debt and bad debt,” he said. “Taking EMI for an iPhone or Amazon sale isn't the same as borrowing to build a business.”

He warned that 75% of purchases during online sales are made via EMIs, and credit card debt has spiked 44% in just one year—alarming signs of irresponsible borrowing.

Rachna Ranade, speaking from her experience as an educator, added a dose of reality. “Ask any crowd if they want to retire at 40, and 90% raise their hand. But once they see the numbers, they realize it’s not viable.” She emphasized the importance of realistic financial goals, noting India’s wide economic disparities.

The consensus was clear: while consumption powers growth, unchecked debt and low financial literacy could turn a demographic dividend into a debt crisis. The call to action? Stronger awareness, smarter choices, and a cultural shift in how India’s youth manage money.