Around 46 per cent people in the country borrowed money to run their households during the ongoing COVID-19 pandemic phase, stated a research report done by Home Credit India.
The report, released on Tuesday, was done to understand the borrowing patterns of people in India during the COVID-19 lockdown phase, which was conducted across seven cities including Mumbai, Delhi, Bhopal and Patna, among others.
“46 per cent respondents borrowed money primarily to run their households. The impact of the pay cuts/delays was the next big reason why most borrowers resorted to borrowing, 27 per cent of respondents cited repayment of their monthly instalments from the earlier loan as the second biggest reason behind borrowing. 14 per cent of the respondents borrowed as they suffered job losses,” the report read.
Another revelation from the report was that during the pandemic phase the people opted to borrow from their friends and families to get more flexibility in returning the money.
Half of the total respondents also admitted to returning the borrowed money once the situation normalised or they got their jobs back, while 13 per cent others said they will think of returning it after they have paid off their loans, as per the research report.
The borrowings from family and friends was the highest among respondents in Mumbai and Bhopal, with 27 per cent each, followed by Delhi at 26 per cent, and Patna 25 per cent.
Another fact, which surfaced is that the decision to borrow from relatives and friends was mostly taken by male members, while the women interviewed either preferred not borrowing or borrowing from financial institutions.
Speaking about the research, Marko Carevic, Chief Marketing and Customer Experience Officer said, “We undertake a research every year to understand our customers and their preferences better. The impact of the pandemic is still unfolding and people have gone through an extremely difficult time. Our research on the borrowing patterns of India has revealed some interesting new trends, which contrast with the trends of the pre-COVID times.”
“The lockdown time has seen borrowing happening from family and friends due to the flexibility in returning the amount as the pandemic has set a lot of uncertainty in the lives of people. Incomes are scrunched making people borrow money to run their households,” he added.