Money & Banking

Medical expenses, EMI financing tops chart for reasons of millennial loans

K R Srivats New Delhi | Updated on March 04, 2019 Published on March 04, 2019

Representative image   -  istock.com/turk_stock_photographer

Bengaluru, Mumbai ranked top metros for millennial credit demand

 

Medical expenses and EMI financing are the top two reasons why salaried millennials avail digital loans, analysis by digital lender CASHe showed.

A detailed analysis on its active customer base of one lakh for 2018 showed that medical expenses tops the chart accounting for 31 per cent customers as per the findings.

In the absence of digital lending platforms, these customers are usually serviced by the unorganized sector.

EMIs make the second top reason with 23 per cent of millennial customers resorting to borrowings for such payments.

Another key finding from the analysis was that as much as 47 per cent of credit demand from the millennials were from the near-prime category. These are the customers who would have most likely been deprived of credit from the lending institutions.

Ketan Patel, Chief Executive Officer (CEO), CASHe, said, “With a millennial population of 400 million, India is well on track to becoming the youngest country in the world by 2020, hence there is an extensive gamut of financial needs and a whole cohort to build a banking eco-system of its own”.

The findings reveal, young yet ambitious, the millennial generation enter adulthood with significant financial roadblocks such as borrowing for education, travel and outstation accommodation among others.

With EMIs scheduled to be paid off the moment they get their first job, digital lending characterized with smaller loans and shorter lock-in periods are coming to the aid of the millennial thereby effectively servicing their financial necessities.

CASHe on Monday put out multiple data points and key insights showcasing the typical consumption patterns, buying behaviour and borrowing habits pertaining to millennials across India basis a detailed analysis.

According to the findings, Bengaluru and Mumbai have been ranked as the top metros for millennial credit demand, followed by Hyderabad, Delhi, Chennai and Kolkata in that order.

While in terms of segmentation of loan taken by monthly income, the 26,000 – 50,000 income range topped the list with 42 percent customers falling in the category which were closely followed by the 15,000 – 25,000 income range accounting for 41 percent customers.

‘60 days’ is the average frequency of repeat loans, while 70 percent of its customers are repeat users as per the findings.

While millennial women have been perceived to be the most financially independent cohort, the findings made a startling revelation which states that; of its total only nine per cent are females.

The gender classification data comes in the backdrop of the current phenomenon of “breaking the glass ceiling” everywhere with women working, establishing start-ups, working in jobs, buying their own houses, contributing in family income and so much more.

Published on March 04, 2019
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