Salary delays, downturn impact debt recovery

Delay in salaries and the business downturn are some of the major factors impacting debt recovery across the country, a report has said. The ‘India Delinquency Report’ by CreditMate, a digital debt-collection platform is based on data collected from 2 lakh borrowers was released on Monday.

According to the survey, delay in salaries (36%) and business downturn (29%) were the two main reasons for debt defaults. Medical emergencies(13%), Loss of job (12%) and being out of the city or country(10%) were also cited as reasons for defaults.

Apart from debt default, the report also included other parameters such as the demographics of the debtors and borrowers, types of loans and sector-wise debtors, demand and payment patterns among male and female borrowers, transaction patterns, most-preferred modes of collection, and behavioural patterns of the defaulters, CreditMate. The loan categories comprised two-wheeler loans, personal loans, SME loans, student loans, medical loans and digital loans.

About 79% of the respondents used online modes of payments, while 21% of defaulters made cash transactions. An interesting insight was that while just under 40% used debit cards to make payments, followed by e-wallets, one in five payment transactions were done via UPI.

In terms of the geography, Goa topped states for the best payment rate, while Arunachal Pradesh, Haryana and Delhi were the worst performers. Among cities, Vadodara, Mumbai and Patna were top performers, while Ludhiana, Chennai and Bhopal accounted for the worst payments, the report said.