About 65 per cent people polled in a survey have said that the COVID-19 pandemic and ensuing lockdowns hit their income and 56 per cent respondents claimed to have availed moratorium on loan and credit card dues.
The consumer survey report ‘Dealing with Debt: How India plans to pay EMIs’ by paisabazaar.com was undertaken to gauge the impact of coronavirus pandemic on the Indian borrowers’ income and loan repayment capacity.
It surveyed 8,616 customers with debt outstanding of over Rs 1 lakh in the age group of 24-57 years, covering 37 cities.
“In our survey, a whopping 65 per cent of the respondents said the coronavirus pandemic and the resultant lockdown has had a negative impact on their income. About 16 per cent of them claimed to have lost 100 per cent of their income with another 28 per cent reporting income reduction of more than half due to the ongoing COVID-19 crisis,” it said.
As per the survey, 56 per cent of the respondents said they had availed the moratorium offered by their lender banks or NBFC on their loans/credit card outstandings during March-August.
Paisabazaar.com said more than half of the customers surveyed said they want to apply for loan restructuring.
“55 per cent of the customers responded that they would approach their lender to restructure their loan in some form to provide relief. Within those who have already availed the moratorium, 70 per cent of them said they would like their lenders to provide them some form of relief in their loan repayment,” as per the survey.
However, the surveyor said that these include many whose income has not been affected due to the coronavirus pandemic and hence their lenders may not find them eligible for a loan recast plan.
As a relief to the financially stressed borrowers, the RBI had permitted two-stage moratorium from March to August that allowed deferment of EMIs and credit card payments.
The survey further said that as many as 46 per cent of the customers who had availed moratorium said they do not want a new moratorium. As many as 67 per cent of the moratorium beneficiaries expressed their loan tenure to be extended by up to 6 months only to bring down their EMIs.
As per the findings of the survey, 86 per cent of the self-employed customers said the pandemic has adversely impacted their income while 25 per cent claimed their income has come down to zero.
On the other hand, 44 per cent of the salaried respondents said their salaries have not been negatively affected. Another 30 per cent said their salaries have been reduced by more than half from the pre-Covid levels while 12 per cent claimed to have reported complete loss of salary due to job loss.
Geography-wise, Chennai came out to be the least impacted city by the coronavirus pandemic in terms of loss of income.
Over 48 per cent of consumers surveyed from Chennai said they did not suffered any negative impact due to the health crisis and the resultant restrictions imposed. Only 9 per cent suffered a 100 per cent income loss.
On the other hand, Delhi and the NCR cities were the most impacted with 70 per cent of their resident participants reporting a negative impact on income.
Among these, 16 per cent of customers from the NCR also said their income has come down to zero due to the pandemic related disruptions.
In terms of percentage of customers who had a complete loss of income, Mumbai fared the worst with 26 per cent respondents from the city reporting income plummeting to nil.
Also, Mumbai had the highest percentage of moratorium takers at 65 per cent.
“With the moratorium now over, when we asked consumers about their capacity to repay their EMIs, 66 per cent of respondents from Chennai said they would be able to afford their monthly debt obligation in full.
“Mumbai was the worst placed, with Delhi and Bengaluru only marginally better. 52 per cent of Mumbai respondents cannot pay their EMIs in full, with 15 per cent of them saying they currently have zero payment capacity,” paisabazaar.com said.