A 2019 report by CRISIL and ICICI stated that Consumer Loans in India may hit nearly $1.3 trillion in size by FY24. A consumer loan is a type of loan or credit provided to an individual on a non-secured basis for personal and family expenses, vehicles, homes, etc. Although housing and vehicle loans form the biggest piece of this personal/retail credit sector, other loan products such as consumer durable loans, credit cards, education, individual advances etc. are growing rapidly. 

It would not come as a surprise to anyone to know that the consumer durables and credit card financing piece of this sector have seen impressive growth, with the former growing by 83.9 per cent in 2016- 17, and the latter by 50 per cent.* Think back to how easy it is to buy a new TV, washing machine or the latest iPhone on a ‘No-Cost EMI’ payment offer at your nearest Croma. Consumption of goods and services (e.g. holiday packages) by Indians has grown on the back of easy access to low-cost or no-cost loans that were made available to them by banks and a plethora of NBFCs that have rushed in to provide the ‘lubricant’ that drives consumption. At the end of March 2017, over 11,522 NBFCs were registered with the RBI.*

Now compare this to how you paid for your last medical expense – your own, or any family member’s hospital bill. If you had health insurance, it likely paid for less than 40 per cent of the bill and the rest you probably paid through your savings or through loans (credit card, friends or family borrowing). With the average cost according to Bloomberg, of an ICU bed at $822 per day at a private hospital* and the average monthly income of an Indian at $437, borrowing for healthcare is common and it is financially or emotionally expensive.

Data on how many Indians have been pushed to financial ruin by medical debt is hard to come by, however researchers at the Azim Premji University found* that the pandemic pushed an additional 230 million — more than the entire population of Pakistan — into poverty last year.

How do we solve this? Its simple really. We need to apply the same fervour that we have shown in deploying capital in the retail sector, to a sector that affects all of us in more profound ways than we can imagine. Capital drives consumption and healthcare is one of those last great sectors that has not yet seen the benefits of a friction-free, embedded finance transaction experience.

To be fair, companies like Bajaj Finance or TATA Capital and others have created products for ‘medical loans’, which in my opinion are ‘ambulance-chaser’ products that prey on the desperation of an individual at the point of healthcare consumption. 'Can’t pay your hospital bill? Go to that loans counter and get a loan.' High interest rates, no great customer experience and inherent uncertainty have ensured that consumers do not consider this as a real option in their healthcare transaction journey.

What’s needed is an always-available, hassle-free finance product, similar to your credit card, that sits in your wallet right next to your health insurance card; giving you the power in that uneven equation between you and the healthcare service provider.

Indians paid over $72 Billion on healthcare expenses that they paid from their pockets (savings or borrowings), according to a March 2021, NITI Aayog report. Isn’t it strange that even after such a large volume of spending by you, the average Indian, the power does not lie in the hands of the spender? 'How do I pay for my medical bills' remains the number one thought in the minds of any Indian that has come out of this pandemic and is thinking about managing their own or their family’s health risk. What we need, is to change the way we pay for our healthcare and bridge the gap between what our health insurance pays for and our family’s actual healthcare expenses.