About one out of four people borrowed money from their friends, family during the lockdown mainly to manage daily household needs, according to a survey by Home Credit India Finance.
About 46 per cent Indians borrowed to run their households during the pandemic to make ends meet. This is followed by 27 per cent, who borrowed to pay their monthly instalments and 14 per cent, who suffered job losses in 2020, says the survey released on November 3, 2020.
With job losses and pay cuts witnessed across industries, the lower middle-income group has been the worst affected. This indicates the ongoing pandemic has led to a shift in perspective towards loans and borrowing preferences, says the research.
The survey also points out the highest borrowing from friends and family has been witnessed in Mumbai and Bhopal at 27 per cent each, followed by Delhi at 26 per cent and Patna at 25 per cent.
Interestingly, another insight of the research reveals 50 per cent of the respondents have returned the borrowed sum after the situation has normalised, once they have returned to their jobs. As per the findings, 13 per cent say they will return the sum borrowed after paying their loan amounts.
“The lockdown has seen borrowing happening from family and friends due to the flexibility in returning the amount. The pandemic has brought a lot of uncertainty in the lives of people. Incomes are scrunched, forcing people to borrow money to run their households,” Marko Carevic, Chief Marketing and Customer Experience Officer, Home Credit India says in a release.
The Home Credit India Finance is a local arm of the international consumer finance provider with global exposure in Europe and Asia to drive financial inclusion in India.