Home Credit India, a local arm of the international consumer finance provider with operations spanning over Europe and Asia, conducted a research across 7 cities, to understand the levels of financial literacy amongst the borrowers. Close to 1,000 respondents were interviewed in the survey.
What is your CIBIL score? If you are in this select group of borrowers, then probably, the answer is that you have no idea! This is despite the fact that the ongoing pandemic has had a drastic impact on the economy and people across all strata. Also, with new reforms, policies being announced regularly, a large section of people are left unclear and confused about their various personal finance aspects. Well, know that financial Inclusion is critical to the success of all nations and Financial Literacy is an important step towards being an inclusive nation.
A Home Credit survey shows that Patna has the lowest literacy levels with only 22% of borrowers aware of their CIBIL score, followed by Kolkata (25%) and Mumbai (25%). 76% of borrowers do not know their interest amount on loan, research says.
Just 50% respondents are aware about Mutual Funds; Kolkata leads the research with 66% of people aware about Mutual Funds, followed by Delhi at 61% and Mumbai at 53%, 50% in Patna, 43% in Bhopal, 41% in Hyderabad and only 37% in Jaipur. Encouragingly, 74% of respondents are willing to take Financial Literacy lessons to manage their finances better.
Home Credit India, a local arm of the international consumer finance provider with operations spanning over Europe and Asia, conducted a research across 7 cities, to understand the levels of financial literacy amongst the borrowers. Close to 1,000 respondents were interviewed in the survey.
Amazingly, research also revealed that 76% of the borrowers did not know the interest amount on their loans. They are only interested to know the EMI amount to be budgeted monthly but were found to be unaware of the interest amount separately. Only 17% of borrowers in Delhi, 19% in Jaipur and 24% in Mumbai knew the interest amount on their loans, on asking.
On enquiring about the calculations of interest, a close majority of 43% across the 7 cities said that they only had partial knowledge of how their interest on loan was calculated. The respondents were concerned and kept track of their EMI amount while the knowledge of the rate of interest charged and amount of interest was low.
A whopping 95% of the borrowers said that they fully understood their Bank Passbook and it’s elements. Bhopal leads this trend with a 98%, followed by Jaipur (97%) and Delhi (96%).
Given the low awareness rate, it was heartening to learn that 74% of the respondents would like to receive financial literacy lessons to be able to manage their finances better. Interestingly, only 44% respondents understand the difference between Credit and Debit card.
