Nearly half of Indians have primarily depended upon borrowed money to run their households during the ongoing COVID-19 pandemic, according to a report.
With job losses and pay cuts across industries, the lower middle-income group has been affected severely and the pandemic has led to a shift in perspective towards loans and borrowing preferences, said the report by Home Credit India, a local arm of the international consumer finance provider with operations spanning over Europe and Asia.
The report, based on a survey, showed that 46 per cent respondents borrowed money primarily to run their households.
The survey was conducted among about 1,000 respondents across seven cities to understand the borrowing patterns of people during the coronavirus-induced lockdown, it said.
"The impact of the pay cuts or delays was the next big reason why most borrowers resorted to borrowing, 27 per cent of respondents cited repayment of their monthly instalments from the earlier loan as the second-biggest reason behind borrowing.
"About 14 per cent of the respondents borrowed as they suffered job losses," it said.
The report also showed that unlike normal times, people during the COVID-19 pandemic have preferred to borrow money from their friends and families as it gave them the flexibility to return the money when the situation normalises and jobs or salaries are restored.
The report also showed that 50 per cent of the respondents admitted to returning the borrowed sum once the situation normalises or they returned to their jobs. About 13 per cent of the people said they will look at returning the sum after paying their loan amounts, it said.
Borrowing from friends and family was seen highest in Mumbai and Bhopal at 27 per cent each, followed by Delhi at 26 per cent and Patna at 25 per cent, it said.
The report also showed that the decision to borrow money from family and friends was led by the male members of the households at 23 per cent.