These are the top 5 reasons why Indians take personal loans

• India has 1.9 crore personal loan consumers, said Manu Kumar Jain, the India head of Xiaomi.
• According to a survey by Xiaomi, Indians take personal loans for five reasons – first comes medical emergencies.
• Most surveys say that top reason for personal loans is medical emergencies. But bill payments are also popular for those who take short-term loans.
• A Zestmoney report says that over 20% of loan amounts taken by women were for education.

There has been a dramatic change in the Indian financial services sector. From a time when one would take a personal leave to go to the bank, we have arrived at a time when almost every service is available at the tap of a button.

As fintechs evolve, availing personal loans is no longer a hassle either. This has also led to the birth of many lending startups in India, which give away small ticket personal loans.

Startups like Early Salary, Slicepay even cater specifically to millennials.

A large player in the smartphone market Xiaomi just launched Mi Credit. It sees a potential in the 1.9 crore personal loan consumers in the country, said India head Manu Kumar Jain during the launch.

According to a survey done by the smartphone maker, Indians take personal loans for five reasons – first comes medical emergencies, then shopping, followed by wedding, travel and education.

While it may seem surprising that “shopping” comes second, much before education loans, the trick here is that most of it is small ticket loans.

“Unlike personal loans that provide a one-time lump sum, a credit line gives the flexibility of borrowing as much as you need from your approved credit limit multiple times. So, people use MoneyTap not just for one-time large expenses but also for everyday credit needs,” said Anuj Kacker, COO and Co- founder, MoneyTap.

At MoneyTap too, three main reasons why users take loans are – medical emergencies, bill payments, and family functions/weddings.

However, another leading player in the segment Zestmoney has some interesting insights to share. Lizzie Chapman at the Xiaomi launch said that higher number women take big ticket loans for education purposes.

Earlier in May, Zestmoney had conducted a survey which revealed that “over 20% of loan amounts taken by women were for education, whereas in comparison, the same percentage for men was 6%.”

Moreover, the Zestmoney report also showed that the average loan amount for women is 35% higher than men. In 2019, the average amount of EMI financing taken by women stood at ₹20,000, whereas for men the amount was ₹15,000.

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Xiaomi’s Mi Credit promises to give you a loan by the time you order and finish a cup of coffee