- In 2020, 46 per cent took out loans for household needs, 27 per cent for paying EMIs and 14 per cent for losing their jobs.
- In Mumbai-Bhopal, 27% took loans, followed by Delhi with 26% and Patna with 25%
During the Koro era, 46 per cent of Indians in the country have resorted to loans to run a household. According to a report released by Home Credit India Research, one in four people borrow from a friend or relative to meet the needs of daily life during a lockdown. 46 percent have taken out a debt. While 27 per cent have taken loans to pay the EMI of outstanding loans. Of these, 14 per cent have resorted to debt due to job losses.
Mumbai and Bhopal have the highest number of debt takers at 27 per cent. The ratio is 25 per cent in Delhi and 25 per cent in Patna. In 2019, 46% of people took out a loan to meet the needs of a family. While 33 per cent took out loans with the aim of improving living standards. The impact of the epidemic on the economy has been drastic. The lower middle class has been hit hard by the pay cuts along with job losses. As a result, people have turned to loans and borrowings to make a living.
Home Credit India, a local unit of the international consumer finance provider, conducted research in 7 cities and found out about people’s debt patterns during the Covid lockdown. Most of them have been found to be borrowing money from friends and relatives. As many as 50 per cent of the people are borrowing on the condition of repaying the money as the economic situation returns to normal. 13% of people will repay the loan after repaying their loan.
“Every year we conduct research and try to understand the preferences of the customers,” said Marco Carwick, the company’s Chief Marketing and Customer Experience Officer. This time the epidemic has devastated the people. Research has shown that this time people are preferring to borrow from friends and relatives rather than banks and financial institutions. Male members of the family decide to take a loan from friends or family. This has happened in 23 percent of cases. The women who took part in the survey were in favor of not taking any loan or taking a loan from a financial institution. He preferred not to take loans from friends, family.
Various reasons for taking a loan
|EMI payments||25 percent|
|Household needs||43 percent|
|Business expansion||5 percent|
|Because of unemployment||13 percent|
|Medical Emergency||5 percent|
|Paying rent||3 percent|
Borrowing ratio in 2019
|Consumer durables||43 percent|
|Personal expenses||26 percent|
|Two wheelers||31 percent|