Even as Unlock 1.0 has begun, big ticket purchases by consumers may not. The sentiment seems to have turned towards saving more for rainy days than spending now for immediate consumption. Going by the latest survey, 94 per cent accepted that they will have to be extra careful about how they spend their money in the next few months. As many as 70 per cent respondents said that they would spend less on non-essentials including entertainment, luxury and lifestyle in the post-COVID period, while 84 per cent said they have cut back on spending.
The survey by fintech lender IndiaLends further highlighted that 90 per cent respondents are concerned about their savings and financial future, and nearly 72 per cent said they would opt for a personal loan in the immediate future to meet high-priority expenses such as debt repayment, essentials and medical, education fees, and home repairs and renovation.
"The pandemic has changed the way we all function, affecting our physical, mental, emotional and financial wellbeing. Salaried individuals and professionals, in particular, are coping with the potential burden of job losses and pay-cuts. The impact on their income and savings has seen a growth in demand for retail loans. In these circumstances when finances are stretched and assets are not easily accessible, it is important for individuals to examine their financing options - such as personal loan or line of credit - and plan accordingly for the weeks and months ahead," says IndiaLends Founder and CEO Gaurav Chopra.
Meanwhile, data from RBI for 29 days between March 27 and April 24 showed that retail loan demand decreased during the said period. The credit card segment in retail loans saw a 10 per cent fall in the outstanding loan amount. The credit card loan book stood at Rs 96,978 crore as on April 24, 2020. Unsecured personal loans shrank 3.7 per cent from Rs 7,26,11 crore to Rs 6,99,259 crore during the same 29-day period.
The nationwide lockdown that was announced on May 24 has left many struggling to make ends meet. The survey revealed that 82 per cent respondents have borne the brunt of the pandemic. The fintech lender says that 71 per cent of its customers had existing loans out of which 45 per cent applied for a loan moratorium by the Reserve Bank of India (RBI) due to their inability to repay their debts.
Nearly 5,000 salaried individuals and professionals participated in the nationwide survey by IndiaLends.