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Preeti Mehra
Richa Mishra

"Penetration of consumer durables would be deeper in rural India if banks were ready to finance them. Banks have shown reluctance in this sector and restrict themselves to tractors and diesel pumps."

New Delhi , Oct. 16

IF the next wave of growth has to come for the consumer durables industry, it will certainly be from rural India and with the help of consumer finance, says a study on the `Role of Consumer Finance in Rural India' conducted by Chennai-based Anugrah Madison and Delhi-based Marketing and Research Team (MART) in the three States of Tamil Nadu, Punjab and Uttar Pradesh.

While the consumer durables market is facing a slowdown due to saturation in the urban market, rural consumers are ready to put their money on the counter if consumer finance is made available and basic infrastructure requirements such as electricity and voltage are ironed out.

Currently, rural consumers purchase their durables from the nearest towns, leading to increased expenses due to transportation. Hence, purchase is necessarily only done during the harvest, festive and wedding seasons — April to June and October to November in North India and October to February in the South, believed to be months `good for buying'.

Though penetration of durables is low in the hinterland, the study found that most of the respondents in North India owned at least two — television and refrigerator. While 88 per cent of the respondents had TVs, 75 per cent had refrigerators. Almost 70 per cent of the respondents believed that the introduction of financing schemes would help them to purchase more durables of their choice. In fact, the rural consumer's decision to buy, the study revealed, was largely influenced by what his neighbour had purchased and experienced regarding a product.

In the South, 77 per cent of respondents owned CTVs, 60 per cent owned mixer-grinders and 19 per cent used pressure cookers. "Penetration of consumer durables would be deeper in rural India if banks were ready to finance them. Banks have shown reluctance in this sector and restrict themselves to tractors and diesel pumps. Hence, rural consumers have to depend on private lenders, some of whom are fly by night operators, for this activity,'' says Mr Pradeep Kashyap, Director, MART, as he reveals that the scenario is fast changing with financial players such as the ICICI entering the fray.

Mr Kashyap feels that the potential as well as the aspiration is high in the rural areas. "On a broad level, the ability to buy is almost the same as in the urban areas.'' He refers to National Council for Applied Economic Research (NCAER) study that showed urban families with ownership of at least 3 durables per family. Rural India showed one per family. However, only one-third of rural homes in the country are electrified, hence if this infrastructure impediment is removed, the demand could go up three times.

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