'COVID-19 forces 84% Indians to cut spending,' says IndiaLends survey
According to the IndiaLends survey, the economic uncertainty and the state of individual finances have also impacted investment with 76% of the respondents said they are in no position to consider fresh investments at this time.
A new survey from IndiaLends, a digital lending platform, has shown how the global pandemic and its economic consequences are affecting household incomes and consumer spending, revealing a drastic change in daily lifestyles. People who have lost their jobs or forced to take pay-cuts are less inclined to spend their money on non-essential products and services due to the fear of little or no income in the coming months.
IndiaLends' nationwide survey of nearly 5,000 salaried and professional individuals presented some stark findings: 84% said they were cutting back on spending; 82% of the respondents said they were struggling to make ends meet due to job losses and pay-cuts; 94% said they would be more careful about how they spend their money in the next few months; and 90% expressed concern about their savings and financial future.
Specifically, 75% of the respondents said they would cut spending on holiday travel and luxury goods; 73% said they were curtailing expenditure on out-of-home entertainment; 68% and 63% of the respondents would think twice before buying home furnishings and durables, and apparels and accessories, respectively; 70% said they would put off buying a new vehicle; and 33% said they were not planning to rent a home at this time.
Not surprisingly, 40% of the respondents said they were spending more on essential items and other necessities, even as they were struggling to weather the storm or simply survive in these uncertain times.
But, in spite of their financial woes, the respondents also revealed that they would not be averse to taking a loan to tide over the present crisis — nearly 72% said they would opt for a personal loan in the immediate future to meet high-priority expenses such as debt repayment, essentials and medical, education fees, and home repairs and renovation. As per IndiaLends’ data, 71% of its customers had existing loans out of which 45% had applied for a moratorium due to their inability to repay debts.
IndiaLends Founder and CEO Gaurav Chopra said, “The pandemic has changed the way we all function, affecting our physical, mental, emotional and financial wellbeing. Salaried individuals and professionals, in particular, are coping with the potential burden of job losses and pay-cuts, and at the same time ensuring their families are provided for. The impact on their income and savings, and the inability to spend much on both essential and non-essential products, has seen a growth in demand for retail loans. In these circumstances when finances are stretched and assets are not easily accessible, it is important for individuals to examine their financing options — such as personal loan or line of credit — and plan accordingly for the weeks and months ahead. Towards this end, we are making the application process easier and convenient, and ensuring quick disbursal of loans through a touch-less and contact-less system.”
According to the IndiaLends survey, the economic uncertainty and the state of individual finances has also impacted investment with 76% of the respondents said they are in no position to consider fresh investments at this time.