PMAY 2.0 boosts digital payment adoption, fuels financial inclusion among low-income borrowers: SBI Research

Core Insights - The Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U 2.0) is significantly impacting digital payment behaviors among beneficiaries, enhancing both discretionary and non-discretionary spending [11][12] - Launched on September 1, 2024, PMAY-U 2.0 aims to assist one crore eligible urban families from Economically Weaker Section (EWS), Low-Income Group (LIG), and Middle-Income Group (MIG) [2][11] - The scheme is linked to a perceived wealth effect from home ownership under subsidized interest rates, empowering borrowers financially [7][11] Digital Payment Trends - Digital transactions, especially UPI payments, have surged among PMAY beneficiaries, with average monthly UPI spending increasing by Rs 5,050 from Rs 40,032 to Rs 45,081 post-loan disbursement [3][11] - Debit card spending remained stable, indicating that while non-discretionary spending held steady, discretionary digital payments saw a significant rise [6][11] Gender Empowerment - Female borrowers exhibited the most significant increase in digital payments, with average UPI spending rising by Rs 7,522 post-loan, nearly double that of male borrowers [8][12] - The requirement for property registration in the name of a female head of household or jointly with her spouse is linked to enhanced digital financial participation [9][12] Regional Insights - Borrowers from urban and semi-urban areas experienced the largest gains in UPI transactions, increasing by Rs 6,093 and Rs 8,848, respectively, while metro borrowers showed marginal declines [10][12] - PMAY-U 2.0 has sanctioned over 1.2 crore houses with 75% construction completed, positioning it as a key driver in India's digital economy and formal financial ecosystem for lower-income households [10][12]