People willing to take loans for family needs, improving lifestyle

People willing to take loans for family needs, improving lifestyle

Two out of three people in India are willing to take a loan to fulfil the needs of the family or to simply upgrade one’s lifestyle, while one out of three people are willing to take a loan to buy a new smart phone, a television set or a refrigerator, an all-India survey carried out by Home Credit India, a part of the Czech Republic-based consumer finance provider Home Credit BV, showed.

The survey highlights that instances of taking a loan for family needs are the highest in cities like Patna (61%), followed by Lucknow (58%), Nagpur (56%) and Jaipur (54%). While taking a loan to buy consumer durables tops the priority list of individuals, the other categories are buying two-wheelers and meeting personal expenses. Travel loans, medical loans and credit card EMIs are the lowest-ranked categories of loans.

Marko Carevic, chief marketing and customer experience officer, Home Credit India, said the company has made a lot of efforts to broaden the ambit of financial inclusion across the world and India is a key market by virtue of the potential it offers. “After China and Russia, India is now showing signs of a resurgence and we have seen the evolution of customers since our entry in 2012.”

Friends and family do play a major role in deciding the loan as 34% respondents said they rely on friends for advice while taking loans, followed by family at 31.8% and colleagues at 25.4%. The survey says people in Mumbai and Delhi are the most evolved in terms of consulting a financial advisor before taking a loan. For other cities, it is the non-formal sources of advice that matters the most.

The survey, to evaluate the pattern of savings, spending and borrowing behaviour, was carried out among 2,571 respondents in 12 cities across the country. NBFCs focus on small-ticket loans for home appliance, mobile phone, laptop and two-wheeler purchases, primarily to people with little or no credit history. They have presence in 179 cities and 29,000 points of sales servicing 9 million customers.