The Covid-19 pandemic and the resultant lockdowns have hit the lives and livelihood of people hard. The most severe impact – especially on the people in lower-income groups – was that of the nationwide lockdown imposed from March 2020.
The prolonged lockdown forced the jobless labourers to flee from metro cities to their homes in villages and small towns.
As a result, requests for small loans in Tier 1 and Tier 2 cities fell during the lockdown, observed SmartCoin – an app-based micro-lending platform that provides small-ticket loans.
By leveraging technology and creating a different business model to ensure that credit was available for the underserved sections of society – the segment most prone to economic shock – in the challenging times of Covid-19 pandemic.
With a customer base of over 50 lakh unique user downloads and presence in 17,000 pin codes, Smartcoin have analysed the data collected over pre, during, and post covid period and witnessed few interesting data trends –
- The portal witnessed people requesting loans from Tier 1 and Tier 2 locations had significantly come down during the first Covid wave, however, it has again bounced back to pre-Covid level, indicating that the migrants are returning to their work cities.
- Smartcoin witnessed that the percentage contribution of demand for loans from lower-income groups (Monthly income less than Rs 14,000) had gone up by as much as 50 per cent during the pandemic as the Covid-19 pandemic affected the lower-income groups the most, breaching Pre-covid levels.
- Although, with the improved situation of the Indian economy, their monthly income has started going up and the contribution has returned to the pre-Covid levels.
- Since the pandemic hit the country again, the platform saw an obvious demand in the loans for medical purposes increasing approximately 30 per cent across city tiers.
- It is also interesting to see that the demand for loans with the purpose of marriage was reduced during the early months of the pandemic but within a few months, the demand has shot up significantly breaching the pre-pandemic levels.
- When the lockdown was imposed across the country the demand for loans with the purpose of travel came down by 30 per cent, but now again the demand has started improving and has gone up by over 20 per cent from those levels.
- The contribution of the youth of up to 23 years of age in loan demand has been on the rise across India. In the pre-covid period, this was at 17 per cent. During the first wave of Covid, it was at 19 per cent and now amid the second wave, it has reached up to 23 per cent.
Expressing his opinion on the borrowing trend, Rohit Garg, Co-founder & CEO, Smartcoin said, “The last couple of months have definitely been one of the toughest times in recent memory and we solemnly stand with everyone who has suffered at the hands of the pandemic across India and the globe. We, as a disruptive fintech enterprise, are unwavering in our commitment towards ushering financial inclusion and financial access for the hitherto underserved and under-banked sections of society. And with a pandemic at hand, our duty towards the country and our people becomes even greater.”
“We have managed to stand our ground during this pandemic and continue to provide valuable financial reprieve and loan packages to those who need it most. We are grateful to our customers across the country who showed trust and spirit and continued to be with us even during these bleakest of hours. We are also confident that humanity will emerge triumphant from this challenge,” he added.