Hire Purchase is a mode of financing that allows a person or a business to purchase an asset by paying for it in installments over a period of time. The ownership of the asset is transferred to the buyer only after the final installment is paid. Hire Purchase has been a popular mode of financing for a wide range of assets in India, including consumer durables, commercial vehicles, and industrial machinery.
The concept of Hire Purchase in India can be traced back to the early 20th century when it was primarily used for financing the purchase of agricultural equipment. The Hire Purchase Act was first introduced in India in 1972 to regulate the Hire Purchase transactions in the country. The Act was later amended in 2004 to provide better protection to consumers and to bring more transparency to the Hire Purchase market.
In recent years, with the growth of the consumer credit market, Hire Purchase has become a popular mode of financing for a wide range of assets, including automobiles, electronic appliances, and household goods. With the increasing demand for consumer goods and the growth of the middle class in India, the Hire Purchase market has continued to grow, attracting new players and innovative financing models.
Overall, the evolution of Hire Purchase in India has been driven by the need for financing consumer and business purchases of assets, as well as by regulatory reforms aimed at improving consumer protection and market transparency.