Home Credit India’s study shows EMI cards emerge as popular consumer choice

HYDERABAD: Home Credit India, a local arm of the leading global consumer finance provider, released its annual consumer study- How India Borrows (HIB) 2022 study, here on Friday.

The HIB 2022 study concludes that more than 50% of the borrowers surveyed show preference to EMI Cards when it comes to shopping or for any credit need. Overall, more than three-fourth of the borrowers led by Tier 1 & 2 cities and Gen Z/Millennials are optimistic and buoyant about digital lending services, owing to rising popularity of online loans, convenience experienced, and faster adoption of digital lending.

The study stated that 52% respondents in Hyderabad showed keen interest in learning financial management, 54% respondents used mobile banking more than internet banking, and 49% respondents were optimistic about fintech growth. However, Hyderabad showed the least interest in embedded finance/EMIs while shopping online when compared to other cities.

On the other hand, North India region has shown resonance with initiating loan applications on WhatsApp chat and online loan journey. East India has shown its affinity strongly towards online shopping, trust in chatbots and having financial service apps on smartphone. West India has inclination towards mobile banking and initiating loan applications on WhatsApp chat.

Speaking on the consumer study, Mr. Ashish Tiwari, Chief Marketing Officer, Home Credit India, said,“The big take away of this year’s How India Borrows study is the digital evolution of consumer credit in India, which is being driven by GenZ/Milennials from Tier 1 & 2 cities. The key borrowing trends point to the emergence of Embedded Finance phenomena leading to the popularity of EMI financing.”

“The new-age consumers are no more averse to going for loans or credit especially small-ticket size to fulfill aspirations and live their life to fullest,”he added.

The study is aimed at understanding the rapidly evolving consumer borrowing behaviour, as the economy undergoes digital transformation in post-Covid world. The survey was conducted across 16 cities including Delhi-NCR, Mumbai, Kolkata, Bengaluru, Hyderabad, Bhopal, Patna, Ranchi, Ahmedabad, Chandigarh, Chennai, Dehradun, Jaipur, Lucknow, Ludhiana, and Pune.

The sample size of the study was approximately 1500 borrowers (Home Credit Customers) in the age group of 18-55 with an average income of Rs. 30,000 per month.

The HIB 2022 shows the positive consumer borrowing trend that was the highlight of 2021 study is going strong this year too irrespective of the macroeconomic headwinds, with 75% borrowers having taken credit to buy consumer durables, home appliances, home renovation and business purposes.

Owing to buoyant sentiments, more than 50% borrowers showed preference for EMI-Cards when it came to shopping or taking credit, followed by credit cards (25%), with new-age lending platforms including ‘Buy Now, Pay Later’ evidently losing out with less than 10% in favour. Borrowers now view EMI Cards as trustworthy, with timely approvals & quick disbursals.