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Klarna Customers Seek Loans for Groceries as Debt Risk Rises

  • Customers use Klarna to cover necessities between paychecks
  • Klarna is grappling with rising interest rates, cash burn
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Klarna Bank AB, which advertises itself as a way to spread the cost of the latest brands and smartphones, is shelling out loans for milk and gas with cash-strapped customers looking for ways to cover basic necessities.

Linda Cruz, a mother of four from a small town near San Antonio, Texas, started out using Klarna’s interest-free loans for occasional, large purchases -- like a new air conditioning unit after hers died during a heat wave last summer. But as prices started to rise for essentials, she started using it for groceries, too.