Covid-19: uptick in money borrowers in Bengaluru

Bangalore City Pandemic

One in every five consumers in Bangalore are feeling anxious due to finances says Swiss Re COVID-19 Consumer Survey.

Bengaluru: Since the outbreak of Coronavirus, the number of money borrowers is drastically increasing in Bengaluru. People are borrowing to recover from debts and run their families. Around 75 percent of loans in Bank of India, 20 percent home loans in State Bank of India, and 10 percent gold loans in Manappuram Gold Finance have risen, say bank employees.

People are borrowing money not only from banks but also from their relatives. Home Credit India 2020 survey shows that over 46 percent of people in India borrowed money from their relatives to run their households amidst the pandemic.

Sharwan Kumar, who runs a foot wear shop in Aradeshanahalli, said, “Amid lockdown, I lost over Rs.4 lakhs because the shop was closed; So, I applied for a loan of Rs.6 lakhs in Bank of India to run my shop.” A recent report states that because of Covid-19, one in every five consumers in Bengaluru was feeling anxious due to finances.

V. Vishwanathan, SBI Deputy Manager, in Hemmigepura Gollahalli, said “More number of people are taking loans when compared to before the pandemic. Those who depend on loans to recover from debt are mainly the ones who are taking loans. These include people who lost jobs during Covid-19, employees working from home and daily wage workers.”

Pratim Kumar, a customer in SBI, Hemmigepura Gollahalli said, before the pandemic he had taken a bank loan of Rs.8 lakhs for higher studies and that now his family is not able to repay the loan.

Ms. Thara, Branch Head, Manappuram Gold Finance Ltd, Kumbalgodu, said, “Due to the lockdown, many people are now coming to take gold loans and about 10 percent of gold loans have increased now.”

Dr. Janaki Ram, Professor in Canara Bank School of Management Studies (CBSMS), said people getting low income after lockdown is the major reason for borrowing money from banks and their relatives. “Due to increase in prices after lockdown, the revenue that people are getting may not be sufficient, in order to fill this gap people are taking loans,” he said.