Customers chose United Payments Interface (UPI) as their second most preferred method of repaying digital loans, coming at 27 per cent, only after e-NACH which was the preferred route for 36 per cent of the borrowers.

Further, 84 per cent customers prefer taking a credit line over personal loans (14 per cent) and BNPL (Buy Now Pay Later 2 per cent), as per, the Financial Mood of the Millennials Report by financial services platform CASHe for FY23. The report is based on customer behaviour of 540,000 millennials on its ‘Sqrrl’ investment platform.

Satchetised loans of less than ₹10,000 are preferred by 49 per cent of millennials, the data showed adding that there is significant credit demand from bureau-based prime (44 per cent) and near-prime (38 per cent) millennials.

Key reasons

Unforeseen medical and monthly expenses were the top two reasons found for availing of short-term digital credit followed by shopping, home renovation, education, among others, which reflects the need for unsecured and accessible digital credit products, the report said.

Bengaluru led among cities for credit demand followed by Hyderabad, Pune, Ghaziabad, and Gurugram. West Bengal, Punjab, Gujarat, Assam, and Kerala were the States from where millennials with the highest bureau scores have availed credit.

Investment avenues

SIP (systematic investment plans) has emerged as the most popular option for online investors, accounting for 35 per cent of investing activities, digital gold for 18 per cent, tax-saving products for 15 per cent, goal-based investments for 10 per cent, real estate for 10 per cent and fixed deposits for 5 per cent.

“There is a growing consciousness among millennials to start saving early for their post-retirement life,” the report said, adding that 33 per cent millennials believe in saving 20 per cent of their annual income for retirement.

It also showed that 68 per cent millennials seek assistance from financial advisors for making investment decisions, whereas another 45 per cent trust social media. While 63 per cent of those studied were finally independent, 37 per cent were somewhat financially dependent on their parents.

Mumbai-based CASHe is an AI-based, credit-led financial wellness platform focused on financial inclusion by serving the underserved digital customers in India. Since 2016, the company has disbursed loans worth ₹7,000 crore to over nine lakh customers. It pegs the market of underbanked urban millennials at 125 million.