68% of Borrowers are uninformed of their CIBIL Score, Disclosed by Home Credit Survey

By | April 18, 2022

Information: 68% of Borrowers are uninformed of their CIBIL Score, Disclosed by Home Credit Survey

To understand the financial literacy levels a research has been conducted that reveals that Patna has lowest literacy levels with only 22% of the borrowers who know their CIBIL score, next comes Kolkata with 25% followed by Mumbai with 25% rate

  • Research reveals that 76% of the borrowers does not even know the interest amount they have to pay on loans
  • About the Mutual funds only 50% of the respondents are aware. Kolkata leads the research having 66% of the people sufficient awareness regarding mutual funds, next comes Delhi with61% rate followed by Mumbai at 53%.
  • To manage all the Finances better 74% of the survey respondents showed willingness to take Financial Literacy Lessons.

New Delhi, December 3, 2020: Economy and people across the strata of the society had to face dreadful impacts of the ongoing pandemic. The Financial aspects remained un cleared and confusing for a large section of people as new reforms and policies have been announced on regular basis. For the success of the nation as a whole the financial inclusion is important and to become an inclusive nation Financial Literacy is very important.

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Across the 7 cities a research has been conducted by Home Credit India, serving as a local arm of the International Consumer Finance Provider operating over Europe and Asia to analyze the financial literacy among the borrowers. In the Survey close to 1000 respondents were interviewed

The awareness of the meaning and importance f CIBIL score is among 52% of the borrowers as revealed in the survey. The borrower5s eligibility to take the loan is understood by a parameter named as CIBIL score Interesting part is , that even after taking the loan the borrowers do not know the actual meaning of CIBIL score. Having said that, 68% of the borrowers even do not know what CIBIL score is. The number of the awarded respondents lowest than the country average was observed in Patna with only 22% of the people having understanding about CIBIL score followed by Kolkata and Mumbai having the rate of 25%

The research revealed that 76 of the borrowers does not even have knowledge about the interest rates against the taken loans They are only concerned to check the EMI amount to be budgeted on monthly basis and have zero knowledge about the interest amount separately. When asked only 17% of the borrowers in Delhi, 19% in Jaipur and 24% in Mumbai have adequate knowledge about the interest amount.

Upon Enquiring, insufficient and partial knowledge about the interest calculation process on the loans taken has been observed to be 43% as a whole in the 7 cities. The respondents are only concerned to know their EMI amount while low knowledge about the charged interest rate and interest amount has been observed.

Mr. Marco Cerevic, Chief Marketing and Customer Experience Officer while expressing his observations regarding the research have said,

“Financial Literacy is imperative for any country’s economic progress. This research on Financial Literacy is aimed to understand our customers’ knowhow of their finances management better. The research revealed that a majority wants to understand their finances better and are keen to take financial literacy lessons. This help us draw a meaningful financial literacy program that will help our people build an understanding of basics of Personal Finance like budgeting, good debt vs bad debt, when to borrow etc. As a responsible lender we regularly engage with our customers and the community at large to educate them about important aspects of financial management and borrowing. Our financial education program Paise ke Pathshala creates an ecosystem where people can make informed, thoughtful, and beneficial financial choices at every stage of their lives. The program is aimed to encourage people, to set life and financial goals, and provide them with the basics of money management to increase their financial awareness and success. We wish to broaden financial inclusion in India.”

Only 50% of the respondents were found to have enough knowledge about mutual funds. About the mutual funds 66% people of are awre in Kolkata followed by 61% rate in Delhi, in Mumbai the rate was found to be 53% and Patna with a rate of 50%, in Bhopal rate id 43% followed by 41% in Hyderabad and only 37% in the people of Jaipur.

    Interestingly, the Bank passbook is fully understood by 95% people and the elements it possesses. Bhopal stands first leading the trends with 98%, Jaipur has 97% trends followed by Delhi with 96%.

To manage their finances easily and in a better way, 74% of the respondents want to get financial literacy Lessons as they have low awareness rates. The difference between credit and debit cards is only understood by 44% of the respondents. Despite having frequent visits to the bank branch, using their passbooks only 87%of the people know the actual meaning of a savings account and only 80% know about the current account and its features. As compared to men women who participated in the research have low financial literacy.

Across 350 cities, 11.3 million customers are served by Home Credit giving them hassle-free financial options and people can avail of all these options from the strongly established network of around 31500 Point of Sales (PoS). By responsibly leading the country, the company has a commitment to drive more penetration of credit and spread broader financial awareness.

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