Credit with a purpose: How GenZ is transforming borrowing in 2025?

India’s Gen Z is shaping their future, prioritizing financial independence, personal growth and smart financial decisions. 2024 borrowing patterns reveal this trend, poised to influence 2025 habits. Gen Z is increasingly utilizing solutions for career advancement, business growth and life requirements & experiences. Looking ahead, 2025 is projected to be a year of enhanced financial planning, skill development and credit utilization for self-reliance.

Gaurav Jalan, Founder & CEO, mPokket, commented, "Gen Z isn't just reacting to financial challenges—they're proactively shaping their financial future. Their 2024 borrowing habits demonstrate a strategic approach to credit, not just a need. From skill investment and business ventures to managing responsibilities, they're proving financial independence is about control, confidence, and purpose. In 2025, this generation will continue redefining smart borrowing for a fulfilling and fearless life”

A health-first mindset to shape borrowing trends Financial security is no longer just about aspirations— it’s about immediate relief and support. 24% of Gen Z borrowed for medical emergencies in 2024, with 88% of expenses going toward medicines and treatment. Accessing quick and reliable financial support remains crucial to ensure timely medical care and relief.

Increased trust and usage of digital lending solutions for medical expenses, financial tools tailored to emergency medical expenses are to be expected in 2025.

Skilling and career growth take center stage

India’s young workforce is prioritizing professional growth and skill enhancement more than ever. In 2024, 57% of borrowers under 30 used loans to build specialized skills, gain industry-relevant knowledge and advance their careers. Whether through short-term courses, digital certifications, or technical training, this trend signals a shift toward continuous learning as a means to secure long-term financial stability.

Rise in short-term, high-impact learning investments, growing demand for flexible financing for global certifications and niche skills, and a shift toward multi-disciplinary education to future-proof careers is expected in 2025.

Financial responsibility and independence will define borrowing behavior

While ambitious, Gen Z remains financially grounded. In 2024, 39% borrowed for essentials like rent, groceries, and utilities, demonstrating a pragmatic approach to money management. This suggests 2025 will see increased strategic borrowing, using credit as a safety net.

Greater financial literacy among young borrowers, rise in demand for borrowing options with flexible repayment, and more Gen Z individuals planning their financial future with clear goals is expected in 2025.

Entrepreneurship is no longer a side hustle—it’s the main goal

Gen Z is not waiting for job opportunities—they’re creating them. In 2024, 25% of young professionals borrowed to fund their business venture ideas, with 59% of these loans directed toward expansion and 27% toward marketing. The coming year will likely see a surge in independent work and small business financing, as this generation continues to prioritize financial autonomy over traditional employment.

Increased demand for working capital among young entrepreneurs, more professionals are using credit to fund freelancing and independent careers, and a rise in digital-first businesses, fueled by accessible credit are to be expected in 2025.

Smarter borrowing for lifestyle goals

While business and career growth remain priorities, Gen Z is not putting life on hold. In 2024, 20% borrowed for lifestyle needs, with shopping (45%) and travel (31%) being the top spending categories. This trend suggests that in 2025, young Indians will focus on mindful spending—seeking experiences and quality investments rather than impulsive purchases.

A shift toward planned spending on high-value experiences (travel, wellness, learning), more Gen Z borrowers are using credit strategically to enhance their lifestyles, and growing preference for financial flexibility, to allow them to balance aspirations with responsibilities.