According to an annual survey ‘How India Borrows’ (HIB), post the second wave of the COVID-19 pandemic, shows a largely positive consumer lending trend and thus, reflects a return to normalcy as consumer sentiment remains positive. and is excited about the economic revival. by the financial firm Home Credit India.
About 40 per cent borrowers expressed their willingness to switch to digital platforms to avail loans. This is in addition to the 15 percent of customers who have already graduated online loan Travel instead of traditional offline channels.
Although technology has been a key enabler, the survey findings show that like all digital trends, chatbots are driven by familiarity and trust in the age-old customers who lead it.
The HIB study was conducted in 9 cities which include Delhi, Jaipur, Bangalore, Hyderabad, Bhopal, Mumbai, Kolkata, Patna, Ranchi. The primary sample size was over 1,200 respondents (Home Credit customers) in the age group of 21-45 years with income below Rs 30,000 per month.
There has been a sharp decline in borrowing to drive household expenses in 2021, up from 85 per cent last year, showing a transition from need-based lending to desire-based borrowing due to the revival of the economy, the survey report said. has gone.
It said there has been a significant increase in borrowings for business set-up or expansion accounting for 28 per cent, followed by small loans or credits for purchase of consumer durables at 26 per cent of total borrowings.
Other positive reasons were home renovation/new construction (13%), medical emergencies (2%), vehicle Loan (9 per cent), marriage (3 per cent), education loan (2 per cent), investment and repayment of previous loan etc. (1 per cent).
The survey identified more than 50 per cent increase in lending as of 2020, however, lending to run households declined, it said.
The pandemic has also accelerated digitization as an increasing number of borrowers are showing a preference to adopt the online loan journey for future lending, hence strengthening digital empowerment in financial services, although penetration of financial literacy is still a work in progress Vivek Kumar Sinha, Chief Marketing Officer, Home Credit India said.
Due to many job losses, salary cuts, there has been an increase in consumer requirement towards business revival this year.
Regionally, the survey findings show that Bengaluru and Hyderabad recovered faster from the pandemic, with 41 per cent of respondents in Hyderabad taking loans for business revival and 42 per cent of respondents taking loans in Bengaluru to purchase consumer durables .
States such as Bihar and Jharkhand have the lowest internet population at 24 per cent and 29 per cent, respectively, while Patna and Ranchi recorded digital literacy at 64 per cent and 65 per cent, respectively, in terms of mobile phone usage.