A new survey has highlighted a growing trend among Indian consumers towards using digital services for loans and financial transactions, coupled with a significant lack of awareness about data privacy.
According to Home Credit India’s ‘How India Borrows Survey 2023’, only 18% of borrowers surveyed had a comprehensive understanding of data privacy rules, while a staggering 88% possessed only a superficial knowledge of the matter.
The survey underscores a pivotal shift as India moves swiftly into the digital lending era. However, it brings to light a critical concern: the apprehension among borrowers about how their personal data is being utilized by loan companies.
Approximately 60% of borrowers expressed worries about the collection and use of their personal data by lending apps, and 58% felt that these apps gather more information than necessary.
The concern is notably high among residents of smaller towns and the Gen Z population (those born between 1996 and 2010), with 78% of borrowers in Chennai, a city perceived to be more digitally advanced, worried about data collection. Interestingly, 76% of Chennai’s borrowers claimed to understand the usage of their personal data.
Despite the growing use of digital lending services, the survey revealed that only 23% of Indian borrowers are aware that loan apps utilize their personal data, and nearly 60% believe they have no control over the shared information.
A significant 70% of borrowers, predominantly males and Gen Z, expressed the need for transparent communication regarding the usage of their personal data.
The survey also shed light on the aspect of digital literacy among Indian borrowers. About 23% of middle-class borrowers are familiar with chatbot services, with 43% of them, mainly women and Gen Z, finding it user-friendly.
An emerging trend noted in the survey is the use of WhatsApp as a channel for loan services, with 59% of borrowers receiving loan-related messages on the platform.
However, only a quarter of these borrowers view WhatsApp loan offers as trustworthy, although Gen Z shows a higher level of trust in these offers.
Conducted across 17 cities including Delhi-NCR, Mumbai, and Kolkata, the survey questioned 1,842 borrowers aged 18 to 55, with an average monthly income of Rs 31,000, uncovering vital insights into India’s evolving digital lending landscape and the accompanying privacy concerns.
