Lenders in honeymoon period as wedding loans soar
Loans for household expenditure dip; while loans for business purpose rise 11%
image for illustrative purpose
Wedding loans constituted of 33 per cent, highest amongst other purposes, during the second wave of the pandemic as compared to 22 per cent during the first wave.
Likewise, 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, a study has revealed.
The study was conducted on loan trends among young Indians on the occasion of International Youth Day. It 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 following time 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.
This surge in applications for wedding loans was owing to a year-long delay in their wedding plans brought about by the pandemic. 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 business. It was delightful to note that 10 per cent applications for both weddings as well as for business purposes were received from women borrowers, says the findings of the study which was conducted by IndiaLends - a digital lending platform - on India's youth (aged between 20-35). IndiaLends Founder and CEO Gaurav Chopra said: "We are thrilled to see continuous shift 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. We at IndiaLends wish to be at the forefront of this dynamic fast-changing ecosystem by remodelling our existing products to the
new ever-evolving world, catering to the needs of the younger population thus also fostering financial inclusion for the community at large."
Loan applications for household expenditure saw a dip during in the second wave concluding that youth are now better prepared to meet their financial needs.
The average ticket-size of loans for wedding was Rs 4.13 lakh, followed by medical expenses Rs 4 lakh, household expenses Rs 3.43 lakh and for business 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 & two-wheeler loans and travel loans 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.
