The COVID-19 pandemic has left a deep economic impression on businesses, jobs, and incomes. Compelling people to reconsider their financial position and priorities, this change has reflected the way people save and borrow. BankBazaar and IndiaLends conducted surveys that revealed Indians are worried about their financial prospect, concentrating more on saving and adapting to digital lending in these times of uncertainty.
BankBazaar surveyed around 1,112 customers to analyze the influence of covid19 on personal finance management and published the findings and conclusions in a report called MoneyMood COVID Edition. The survey revealed that people have become more hidebound when it comes to their financial priorities. The discretionary spending has been falling and saving, investing and loan repayment have gained more prominence. The survey asked what would their highest financial priority be post-pandemic, 52% said saving, investment and debt payment. 24% said household expenses, utilities and education, and 13% said healthcare and insurance. In a variation, only 11% responded saying personal spending, recreation and entertainment would be their topmost priority.
The economic detriments of the lockdown and new norms of social distancing have been notable. The disruption in the supply side has led to a collapse of demand. Along with the loss of jobs and staying away from workplaces for a long time, people have become more cautious about spending. As the people and conditions are gradually getting back to normal, economic activities are seeming to pick up. There is an increase expected in terms of the consumption of goods and services. Nevertheless, the uncertainty has led to a change in consumer behavior causing impulse purchases to drop, discretionary spending remains at a low, and people are striving to save more to combat over unforeseen uncertainties. According to the recent survey, even while the economy begins to recover, spending patterns may no longer be the same as before, essentially due to the introduction of social distancing norms
As per IndiaLends survey reports, they confirmed BankBazaar’s findings. It showed that 82% of Indians are bearing the financial brunt of COVID-19. According to their survey of more than 5,000 respondents, 94% of the respondents said they would have to be extra careful about how they spend their money in the coming few months, 84% said they were humbling on spending, and 90% communicated concern about their savings and financial prospects.
“The financial fallout from the COVID-19 pandemic has resulted in far-reaching consequences for many. Our survey shows, despite reducing their expenses, a staggering 82% of respondents foresee problems in making ends meet. To overcome this crisis, they are actively looking for personal loans, even as they repay existing debt. With the lockdown coming to an end and the virus set to be part of our lives, individuals must take stock of their financial situation and plan for the times ahead,” says Gaurav Chopra, CEO and founder, IndiaLends.
Contactless Financing is the new vogue
According to the IndiaLends survey, 72% of respondents were planning to opt for personal loans to take care of their financial crunch arising from the pandemic. Digital and contactless transactions have been in the limelight since the outbreak of the pandemic. The BankBazaar survey observed that 71% of people would prefer to digital credit mainly due to convenience and social distancing norms. Nevertheless, 29% of respondents said they preferred a face-to-face interaction with a bank representative before choosing credit.
While the pandemic has reshaped the way we organize our finances, most services are evolving to meet the emerging needs of customers, and also paving their way towards digitization.