Eastern India Still Hesitant To Take Big Loans: Study

New Delhi, August 8: As financial inclusion is all set to take a front seat in Indian economy, a study reveals that people in the eastern part of the country is still hesitant to take a big ticket loan compared to other parts of the country and Patna tops the chart.

Patna tops in people who feel having a loan is a stressful feeling (54%). Patna also tops in people who have a fear that they won’t be able to payback the loan (51%).

The study revealed when it comes to taking loans for enhancing their lifestyle, Indians from the south top the list followed by east and north.

This report was commissioned by Home Credit India, a local arm of the Prague-based consumer finance provider with operations spanning over Europe and Asia.

This study conducted by research agency Absolutdata has been commissioned across 12 cities and 2,571 respondents have been evaluated to provide a near to accurate pattern of savings, spending and borrowing behaviour in the country.

The survey from across 12 cities of India across regions revealed that almost 67% of Indians were not opposed to taking loans especially if it fulfills their family’s desire or upgrades their lifestyle.

“After China and Russia, India is now showing signs of a new resurgence and we have seen the evolution of the customers since our entry in 2012. The survey is yet another attempt to understand our customers so that we can customise our product offering to the need,” said Marko Carevic, Chief Marketing and Customer Experience Officer, Home Credit India.

“We continue to build on the collective market intelligence coupled with our proprietary methods and technologies to evaluate all borrowers. As a company propagating responsible borrowing, we also effect responsible lending,” he added.

Home Credit, with seven years of operation in India has 29,000 point of sales, with 9 million plus customers. It is present in 20 states and has 15,000 employees.

The company’s Indian loan book size is Rs 6,500 crore.

The study revealed that the desire to fulfill the needs and the wishes of the family tops the reasons for taking a loan in the future.  So while lifestyle is important, respondents have revealed that fulfilling family needs and their wishes constitutes the single topmost reason for people wanting to take a new loan at an average of 46 per cent nationally. Family orientation and needs is highest among people in Patna (61%) followed by Lucknow (58%), Nagpur (56%) and Jaipur (54%). 

The average age of the loan takers is 31-32 years.

The second reason why most Indians are willing to take a loan is to upgrade their lifestyle. The survey revealed that 33% of Indians are willing to take a loan for a consumer durable item such as -- mobile phone, television and refrigerator. The other vastly popular loan categories are the two wheelers (23.3%) and personal expenses (20.3%).

This is followed by purchase of cars (12.5%), house (12%) and gold (10.5%). When asked about the future, 33 % of the respondents are likely to take it for consumer durables while personal loans are the next high interest segment at 28% followed by two wheelers at 22.8%. Agriculture loans (0.7%), credit card EMI (1.1%), travel loans (1.5%) and medical loans (3.7%) are the lowest ranked categories of loans.