Priyanka Parashar/Mint
Priyanka Parashar/Mint

High interest rate on personal loans deter urban India

Usage in percentage terms was reported from the income category of `1 crore of the western region.

Personal loans carry a high rate of interest and that could be the reason that not many urban households avail this loan. The second series of the Indian Financial Scape survey, conducted by Delhi-based economics research firm Indicus Analytics, tracks patterns of debt usage of the urban India. In its third week, we look at personal loans and the pan-India average stands at 3.29%. The data is split across income groups and regional variations. At least 35,000 households were surveyed across urban India over the period April-June 2012. The national average is pulled up a tad because the western region, at 4.79%, of the country avails the loans prolifically compared with other regions. The eastern, northern and southern regions showed an average of 2.02%, 2.63% and 2.59%, respectively. Interestingly, the usage in percentage terms at 9.36% was reported from the highest income category of 1 crore of the western region.

Key takeaways:

1. The eastern region of the country is a laggard at 2.02% whereas the western region leads at 4.79%.

2. The urban households in the highest income category of 1 crore and above of the western region avails the facility the most in percentage terms.