International Youth Day 2021: A study conducted by digital lending platform IndiaLends on India’s youth (aged between 20-35) shows wedding loans constituted of 33 percent, highest amongst other purposes, during the second wave of the Covid-19 pandemic as compared to 22% during the first wave. Business loans too increased from 16 percent to 23 percent during the second wave of pandemic. Interestingly, loans for household purposes dipped from 40 percent to 24 percent during the same period.
IndiaLends conducted the study on loan trends among young Indians on the occasion of International Youth Day. The study was conducted among both salaried and self-employed young Indians across nine cities — Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai, Kolkata, Jaipur, Ahmedabad and Pune for August 2020 to March 2021 and April 2021 to July 2021 time periods.
As many as 11,000 respondents were evaluated for their loan requirements in nine main categories – wedding, business, education, travel, household, medical, two-wheeler and debt consolidation.
In a statement, IndiaLends said this surge in applications for wedding loans was owing to a year-long delay in their wedding plans brought about by the pandemic.
10% women applicants
With a fear of job insecurity, the second wave of Covid brought a new wave of entrepreneurship among youth, boosting loan applications to start small business. Ten percent applications for both weddings as well as for business were received from women borrowers.
Commenting on the findings of the study, IndiaLends Founder and CEO Gaurav Chopra said, “We are thrilled to see continuous shift among youth behaviour and mindset during the last 17 months of the pandemic. India’s youth have proven to be adapative with the changing circumstances. They are now better prepared to meet their financial needs and are gradually imbibing financial discipline. Their adapatibility quotient gets them ahead of their previous generation.”
Loan applications for household expenditure saw a dip during in the second wave concluding that youth are now better prepared to meet their financial needs.
Average ticket size
The average ticket-size of loans for wedding was Rs 4.13 lakh, followed by medical expenses Rs 4 lakh, household expenses Rs 3.43 lakh and for business Rs 2.62 lakh.
IndiaLends received about 56 percent loan applications from Tier-2 cities both during the first and the second wave of the pandemic. Among others, applications for the purpose of education, car and two-wheeler loans, travel loans etc. were almost similar both in the first and the second waves.
Applications for medical loans did witness a little spike in the second wave owing to the severity of the situation and the impact it had on the health of most of the population.