Festive Time: Demand for small loans soars as festive fever begins to grip the nation
Over the past two years – in 2020 and 2021 – Covid-19 has played a spoilsport – dampening people’s party mood by locking them indoors or avoiding crowded places. With the pandemic fear gone – or at least lessened – people are in no mood to miss the euphoria during the upcoming festive seasons of Dussehra and Diwali this year.
With post-pandemic life returning to normal, a more cavalier attitude towards celebrations, and a happy spending spirit in the air during this festive time, digital lending players like CASHe, Niro, and peer lending platforms -to-peer like LenDenClub anticipate a threefold increase in demand in the coming months. People, especially millennials, are resorting to small loans to meet their various shopping demands.
The increase in demand can be attributed to a variety of factors – as loans for consumer goods have increased, thanks to a multitude of price and sale offers extended by retail and e-commerce platforms during the holiday season. Therefore, many people borrow as a salary advance to meet their festive needs.
Due to the rain of offers and launches in online marketplaces ahead of festivals, millennials seem to be on a buying spree by borrowing money from various online lenders!
New digital lending platforms are reporting an increase in demand for small loans from millennials as festivals approach. P2P lending platform LenDenClub has seen a 97% increase in demand for small loans, with the number of travel loans disbursed more than quadrupling in the same period and expecting a threefold increase in Requirement. in the next quarter. The average ticket size of our loan tranche is usually between Rs 12,000 and Rs 15,000.
Similarly, the digital lender, CASHe, is also seeing pent-up demand for loans with a monthly increase of 35-40% in requests. The average loan size normally hovers between Rs 25,000 and Rs 40,000. Compared to last year, monthly loan applications have increased by almost 400%. The increase in the line of credit is more than 7 times higher than last year.
The following table presents the comparison of loans disbursed between May and August in 2021 and during the same period in 2022:
“We’re seeing increasing demand as we get closer to the holiday season. Our interest rates have jumped 30% and we’re seeing a 50% increase in people making their journey unassisted. We expect may these numbers get even better in the coming weeks,” said Sankalp Mathur, co-founder and CRO, Niro.