Role of Digital Lending in the Evolution of Consumer Spending Behavior

In the past few years, India has witnessed a drastic change in consumer aspirations and spending behaviors. Earlier, people used to have a conservative financial outlook. They were extremely cautious about their spending and used to manage their finances to save for emergency situations and for other big spends such as buying a house or on weddings.

But today people have become more liberal when it comes to spends. They have high aspirations and look for quality when it comes to buying consumer durables. They want to fit in with their peers which is why they no longer want to settle for less and are not afraid to stretch their spends. Shopping has become more frequent thanks to various online shopping portals. Earlier, people used to save all year to go for a vacation and now people have started taking frequent domestic and even international trips.

Evolution of Digital lending

According to a report by World Bank, the Indian middle-class today is willing to spend more and more on education, leisure, consumer durables, telecommunications etc. Also, travel takes the priority of almost 50% of full time employed Indians who spend more than INR 30,000 on travel in a year. Indians have started taking frequent holidays where 81.2 per cent Indians prefer taking holidays for seven days and a whopping 72.8 per cent people take at least 4 or more holidays a year.

Digitization has played a crucial role in evolving consumer’s spending behavior. Along with technological advancements, digitization has paved a way to online lending industries in India. Fintech companies like Home credit have completely transformed the lending process, making extremely easy for people to access instant cash loan. With the help of online lenders, consumers can now avail a loan from the ease of their homes with just a few clicks. The loan gets approved instantly and gets disbursed into their savings account within a matter of few minutes. The entire process is 100 percent online, paperless, and hassle-free.

Also read: Are Digital Investments Better for Today's Generation? – Home Credit

The ease of availing loans has led the personal loan segment of India to grow extensively over the years. Data released by Reserve Bank Of India suggests that personal loans registered the highest growth in all sectors. There was an increase of 20.4 percent in February 2018 as compared with an increase of 12.0 percent in February 2017.

Ease of access to a personal loan from digital lenders today is helping more and more people to not just meet their needs but also fulfill their desires. In the latest report submitted by ICRA (Investment Information and Credit Rating Agency of India), the consumer durable market is all set to grow at a rate of 21-24% per year because of instant and easy loan schemes offered by online finance providers to their customers.

Easy and quick loan disbursals with flexible repayment options from digital lending companies like Home Credit is helping people today to spend on anything they want without worrying about burning a hole in their pockets.