New Delhi: A research report by the State Bank of India (SBI) has said that Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U 2.0) is not only fulfilling the dream of millions of urban poor and middle-class households to own a homeowner, but is also bringing about a significant change in digital payment behaviour.
Pradhan Mantri Awas Yojana-Urban 2.0 (PMAY-U 2.0) is not only fulfilling the dream of millions of urban poor and middle-class families to be homeowners, but is also bringing about a significant change in digital payment behaviour.
“PMAY is now acting as a transformative factor and it is becoming a catalyst for the increase in discretionary and even non-discreet spending,”” the report said.” It has a clear impact on wealth, financial stability and well-being.
SBI Research attributes these trends to increased financial stability and inclusion, as access to affordable housing creates a sense of long-term security.
Launched on September 1, 2024, PMAY-U 2.0 aims to provide central assistance to one crore eligible urban families belonging to Economically Weaker Sections (EWS), Low-Income Group (LIG) and Middle-Income Group (MIG).
The study shows that there has been a significant increase in digital transactions, especially UPI payments, among PMAY beneficiaries.
After the loan disbursement, the monthly UPI expenditure by borrowers increased by an average of Rs 5,050, rising from Rs 40,032 to Rs 45,081, indicating a strong money-effect and better financial confidence.
Interestingly, however, debit card spending remained largely stable, suggesting that non-discretional spending remained stable. At the same time, discretionary digital payments saw a significant increase.
According to the report, the alleged wealth effect of home ownership under subsidized interest rates plays a central role in this practical shift. Borrowers, especially at lower levels of income, feel financially empowered, as housing costs are lower than market rates, freeing up liquidity for other transactions.
The report also found that female borrowers showed the highest growth in digital payments. According to the condition of the PMAY, the property should be registered in the name of the female head of the household or jointly with her husband. The average UPI spending among women rose by Rs 7,522 after the loan, which is almost double the increase seen among male borrowers.
“The condition has a positive impact on spending,”” the report said.” The average monthly change in UPI spending of female borrowers is almost double that of male borrowers.”
This finding highlights the gender empowerment dimension of PMAY, which links asset ownership to increased digital financial partnerships.
Further, borrowers in urban and semi-urban areas saw the highest growth in UPI transactions, up Rs 6,093 and Rs 8,848, respectively. But there was a slight decline in borrowers in metros, possibly due to the rising cost of living. With over 1.2 crore homes being sanctioned and 75 per cent completion of construction, PMAY-U 2.0 is not only emerging as a housing success story but also emerging as a key driver in India’s digital economy, deepening the formal financial ecosystem for low-income families.
