A significant percentage of borrowers prefer to obtain a loan online: survey

A significant percentage of millennial-led borrowers prefer the online mode to obtain loans over traditional offline channels, indicating an increase in digital penetration during the COVID-19 period, according to a survey.

After the second wave of the COVID-19 pandemic, shows a largely positive trend in consumer borrowing and, therefore, reflects a return to normal as consumer sentiments are positive and dynamic about the economic recovery, according to one annual “How India Borrows” (HIB) survey conducted by financial firm Home Credit India.

Almost 40% of borrowers have expressed their willingness to switch to digital platforms to take out loans. This is in addition to the 15% of customers who have already opted for online lending instead of traditional offline channels.

While technology has been a key enabler, survey results reveal that, like all digital trends, the familiarity and trust of chatbots is governed by the younger customers who run them.

The HIB study was conducted in 9 cities including Delhi, Jaipur, Bangalore, Hyderabad, Bhopal, Mumbai, Kolkata, Patna and Ranchi. The main sample size was over 1,200 respondents (Home Credit clients) in the 21-45 age group, with an income of less than Rs 30,000 per month.

There was a sharp drop in borrowing for current household expenditure to 4 percent in 2021 i.e. 85 percent last year, showing a shift from needs-based borrowing to needs-based borrowing. desire because of the recovery in the economy, the investigation report said.

There was a notable increase in borrowing for business creation or expansion accounting for 28%, followed by small loans or credits for the purchase of durable consumer goods to 26% of total borrowing. he declares.

Other positive reasons were home renovation / new construction (13%), medical emergencies (2%), car loan (9%), marriage (3%), education loan (2 %), investments and return from a previous loan, etc. (1 percent).

The survey identified a more than 50 percent increase in borrowing in 2020, however, borrowing to manage households declined, he said.

The pandemic has also led to the acceleration of digitization, as a growing number of borrowers show a preference for adopting an online lending pathway for future borrowing, thus boosting digital empowerment in financial services. , although the penetration of financial literacy is still ongoing, Home Credit India, said Vivek Kumar Sinha, Director of Marketing.

With many people experiencing job losses, pay cuts, this has resulted in an increased need for consumers to relaunch businesses this year.

At the regional level, survey results indicate that Bengaluru and Hyderabad have recovered more quickly from the pandemic, with 41% of respondents in Hyderabad having taken out loans for business revival and 42% of respondents in Bengaluru for purchases of durable consumer goods.

While states like Bihar and Jharkhand have the lowest internet population at 24% and 29% respectively, digital literacy in terms of cell phone use in Patna and Ranchi has been recorded at 64% and 65%. respectively, he said.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor


Source link

Comments are closed.