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Wedding loans on the rise in 2nd wave of Covid-19, shows survey

Wedding loans on the rise in 2nd wave of Covid-19, shows survey

Wedding loans constituted 33 per cent, highest amongst other purposes, during the second wave of the pandemic as compared to 22 per cent during the first wave, shows a study conducted by IndiaLends

The average ticket-size of loans for weddings was Rs 4.13 lakh. Photo: Reuters The average ticket-size of loans for weddings was Rs 4.13 lakh. Photo: Reuters

The pandemic has brought huge changes to the lending and borrowing landscape in our country. Lending platforms have seen a surge in the credit demand from retail customers. People borrowed money for medical expenses, taking care of daily expenses in case of a job loss and so on. There was a sharp increase in the small ticket loans rather than the hefty ones. A recent study conducted by IndiaLends, a digital lending platform, on India's youth (aged between 20-35), revealed an interesting outcome.

The top reason for people to borrow during the second wave of Covid was ‘wedding’. "Wedding loans constituted 33 per cent, highest amongst other purposes, during the second wave of the pandemic as compared to 22 per cent during the first wave," said the report.

Business loans, too, saw an increase from 16 per cent to 23 per cent during the second wave of pandemic. Interestingly, loans for household purposes saw a dip from 40 per cent to 24 per cent during the same period. It shows that people are better prepared to meet their financial needs.

IndiaLends conducted a study on loan trends among young Indians on International Youth Day. The study was conducted among both salaried and self-employed young Indians across nine major cities -- Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai, Kolkata, Jaipur, Ahmedabad and Pune for the period -- August 2020 to March 2021 and April 2021 to July 2021. In all, 11,000 respondents were evaluated for their loan requirements in nine main categories, namely wedding, business, education, travel, household, medical, two-wheeler and debt consolidation.

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"This surge in applications for wedding loans was owing to a year-long delay in their wedding plans brought about by the pandemic," said the survey report. With a fear of job insecurity, the second wave of Covid brought a new wave of entrepreneurship among youth, boosting loan applications to start small businesses, it adds. Also, 10 per cent applications for both weddings as well as for business purposes were received from women borrowers.

IndiaLends Founder and CEO Gaurav Chopra said, "We are thrilled to see continuous shifts among youth behaviour and mindset during the last 17 months of the pandemic. India's youth have proven to be adaptive with the changing circumstances. They are now better prepared to meet their financial needs and are gradually imbibing financial discipline. Their adaptability quotient gets them ahead of their previous generation."

The average ticket-size of loans for weddings was Rs 4.13 lakh, followed by medical expenses at Rs 4 lakh, household expenses at Rs 3.43 lakh, and for business at Rs 2.62 lakh. IndiaLends received about 56 per cent of loan applications from Tier-2 cities, both during the first and the second wave of the pandemic. Among others, applications for the purpose of education, car and two-wheeler loans, travel loans, etc, were almost similar both in the first and the second waves. Applications for medical loans did witness a little spike in the second wave owing to the severity of the situation and the impact it had on the health of most of the population.

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