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Emergency funds during the Covid-19 pandemic for medical expenses and credit refinancing was the main reason why millennials took digital loans in 2020, a new survey has revealed.
Post the lockdown, there was a surge in loan demand, mainly for home renovation and shopping, said the ‘Millennial Loan-o-Nomics’ survey by digital lending company CASHe.
“Compared to the trend in 2019, borrowing by millennials was skewed towards purchase of consumer durables,” it said.
Among the key reasons for borrowing, 29 per cent was for medical reasons, 23 per cent for home renovation, 17 per cent for shopping, 16 per cent for credit refinancing, and 15 per cent for other needs.
The 2020 report analysed data of an active pool of over 4 lakh loan applications received from customers outlining multiple data points and key insights showcasing the typical consumption patterns, buying behaviour and borrowing habits of millennials across India.
Loan demand was highest at 81 per cent from millennials earning between ₹10,000 to ₹50,000.
In terms of loan size, 76 per cent of the millennials preferred small-ticket loans ranging between ₹ 10,000 to ₹50,000.
Among cities, Bengaluru was ahead in terms of millennial credit demand, followed by Hyderabad, Chennai, Mumbai, Pune, Gurugram and Kolkata.
Yogi Sadana, CEO, CASHe, noted: “The pandemic has created a spurt in digital payments and digital lending in India that are seeking to address the unmet credit needs of young salaried millennials and under-banked individuals.”