Credit awareness is on the rise in India, with more young Indians resorting to borrowings to fulfil their lifestyle and other needs, according to a report by paisabazaar.com.
More Indians have also become aware of the importance of having a good credit score. About 16.5 lakh Indians have increased their credit score by 50-plus points in the last 12 months, the report said.
According to the report, more millennials are emerging as credit aware and are responsible for their credit and borrowing behaviour.
The report also threw some interesting insight on others aspects, including credit behaviour of the salaried and the self-employed, and also the lowering age group of the first-time borrower.
According to the report, the average age of the first-time borrower is around 27 years as compared to someone in their late 30s a few decade ago. However, most borrowers, 42 per cent, belong to the 35-40 age group.
About 43 per cent customers from the metros had a credit score of 750-plus. In the non-metros, this was 36 per cent. About 75 per cent of the new credit score customers were from the tier-2 and tier-3 cities, the report added. About 40 per cent of these 75 per cent were from the tier-3 cities.
In a previous report, it was found that almost 61 per cent of the millennials surveyed had a credit score of 750-plus. A large percentage, 65 per cent to be precise of the millennials surveyed, were salaried, with the rest being self-employed. The credit awareness was healthy among the self-employed, but still behind that of the salaried, the report said.
The previous report had cited that 54 per cent of the customers who had availed themselves of credit belonged to the top-10 cities. Even here, the number of salaried far exceeded the self-employed by a ratio of 69:31. But in the rest of India, the number of self-employed who were credit aware, was steadily increasing. About 46 per cent of self-employed were credit aware, the report had said.
The number of people who are new to credit had also seen a rise, the report had said. About 23 per cent of customers who had taken a credit report did not have an existing credit score, but wanted to begin their credit journey with right advice on products, the report had concluded.
“We have seen a sharp rise in demand for credit from young salaried professionals and entrepreneurs on our platform over the last five years. These consumers are both confident and comfortable using credit to meet their aspirational and lifestyle needs, along with their life goals,” says Radhika Binani, credit product officer, paisabazaar.com.