* A year after lockdown borrowers positive about opting for personal loans
In Bengaluru, 28% loan applications received were for the purchase of electronic gadgets while; 21% borrowers opted for a personal loan to start their own business. 12% applications were for upskilling courses which points out to the fact that a lot of people utilised their free time to upskill or upgrade themselves.
Infographic_Borrower Pulse Report_March 23, 2021These were some of the significant findings of Borrower Pulse Report by IndiaLends — a new-age digital lending platform to understand the borrower sentiments since the country went into lockdown a year ago. The nationwide study was based on data collected from over 1,50,000 borrowers belonging to the age group of 21-55 years, from Tier 1 and 2 cities, during the period 25th March 2020 to 20th March 2021.
According to the national data, around 25% borrowers opted for a personal loan to start their own business, while 18% borrowers opted for a loan to manage their medical expenses and 17% borrowers opted for a loan to either buy a 2-wheeler or 4-wheeler vehicle, largely due to Covid-19 pandemic and the resultant social and economic impact.
While Delhi NCR saw the maximum number of loan applications, there has also been a 38% increase in loan applications from Tier 2 cities. Due to a decline in luxury expenditure, loan applications from Tier 1 cities saw a muted demand.
Some of the other significant findings of the report were:
· In Mumbai, 27% of the borrowers opted for a personal loan to start their own business; while 15% borrowers opted for a loan to purchase electronic gadgets like laptops, tablets etc. given the shift to a remote working culture
· Delhi witnessed 31% loan applications for the purchase of household durables like washing machine and dishwasher; while 25% applications were for medical expenses owing to to the pandemic
· In Hyderabad, 20% borrowers opted for personal loans to cover their medical expenses whereas 15% of the loan applications were for upskilling courses.
· In Chennai, 19% loan applications were for purchasing 2-wheeler or 4-wheeler vehicles; while 17% borrowers opted for loans to purchase electronic gadgets like Smart TVs, laptops etc.
IndiaLends Founder and CEO, Gaurav Chopra said, “Covid-19 and the pandemic induced financial constraints made the last 12 months one of the most challenging time of our lives. Economic downturn coupled by job losses dealt a big blow to many across the country. However, as IndiaLends’ Borrower Pulse Report suggests, a strong sense of resilience was shown by millennials deciding to take complete control of their financial future. The entrepreneurial spirit showcased by such a large percentage of our borrowers who opted for starting their own businesses during the pandemic is a positive development. It is also heartening to see that a majority of the loan applications came in from Tier II cities which clearly indicates that there is a huge pent-up demand in these under-tapped markets. Our study makes me optimistic about a faster post-pandemic economic turnaround.”
Interestingly, Tier-2 cities consisted of 54% loan applications as compared to 46% from Tier 1 cities. The tier2 cities with maximum loan applications were Coimbtore, Chandigarh, Lucknow, Indore and Kochi.
Among other key findings of the survey, wedding and travel expenses saw a dip in percentage, thus confirming the fact that the younger population is now considering low-key weddings and budget-friendly travel options.
Almost 52% borrowers in the study were in the age group of 25-35 years, thus making it a millennial centric report. The report constituted of both male and female borrowers, who were seeking loans ranging from Rs 10,000 to Rs 50,00,000.