India’s Middle-Class Spending Boom Brings a Growing Debt Burden

A restaurant worker earning 50,000 rupees a month used small loans to fund purchases and personal expenses. Repayments eventually took nearly half his paycheck, forcing him to cut back.

Navjot Singh, a 25-year-old restaurant worker in India, turned to small loans to buy an iPhone that was beyond his monthly salary of 50,000 Indian rupees ($521). He later borrowed to pay for a PlayStation, a television, a wine and spirits course and a trip home.

The repayments soon consumed nearly half of Singh’s paycheck. To keep up with them, he reduced spending on eating out and clothes, canceled his gym membership and eventually stopped playing snooker.

Sources: Bloomberg Markets.

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