New Delhi, Dec 29 : Only 18 per cent of borrowers in India understand the data privacy rules, with the majority of them (88 per cent) having a superficial understanding of the subject, a new report said on Friday.
According to global consumer finance provider Home Credit India, about 60 per cent of borrowers are worried about how their personal data is collected and used by the lending apps.
Around 58 per cent of these worried borrowers also feel that the lending apps collect more data than required.
Gen Z and borrowers from smaller towns show higher concern with the amount of data being collected by lending apps.
Among metros, 78 per cent of borrowers from Chennai voiced their concern about the amount of data collected.
“The survey not only highlights the preferences of today’s borrowers but also emphasises the need for greater awareness of data privacy,” said Ashish Tiwari, Chief Marketing Officer, Home Credit India.
The report surveyed about 1,842 borrowers in the age group of 18-55 years, with an average income of Rs 31,000 per month across 17 Indian cities. Moreover, the report noted that over one-fourth of borrowers opted for online channels for availing loans.
Loans initiated through telecalling increased by 3 per cent (from 16 per cent in 2022 to 19 per cent in 2023), while loans through POS/bank branches saw a decline of 4 per cent (from 56 per cent to 51 per cent).
In keeping with the digital revolution, more than half of borrowers (51 per cent) are looking forward to completing their entire future loan application on a mobile app without any physical connection with POS/Banks.
The preference for online loan mediums is primarily driven by younger and aspirational small-town borrowers, with cities like Dehradun at 61 per cent, Ludhiana at 59 per cent, Ahmedabad at 56 per cent, and Chandigarh at 52 per cent.
In terms of digital literacy, 23 per cent of middle-class borrowers have heard/seen about the chatbot service in the past. About 43 per cent of borrowers found chatbot services as easy to use, led by Women and Gen Z.
According to the report, WhatsApp is an emerging digital channel for loans, with 59 per cent of borrowers having received loan messages on WhatsApp. However, only one-fourth of borrowers consider loan offers received on WhatsApp as trustworthy, with Gen Z showing more trust towards this.
EMI cards continued to be the most preferred medium to take loans, accepted by 49 per cent of the borrowers.