The middle class in India “borrowing for survival”

The middle class in India sinks into a huge debt trap, and the numbers get worse. In Podcast recently, the founder and chief investment employees in the investment managers in Marcelus, Surab Mukherjia, informed an anxious fact-and millions of Indians have obtained multiple loans that they may not be able to pay.

The signs are present everywhere: the height of personal loans, the height of credit card debts, and an increasing number of borrowers who struggle just to meet daily expenses.

“The middle class borrowed the fist,” said Mukherjia, citing RBI data. “Over the past decade, credit card loans and retail loans have jumped from 4 % to 11 % of total banking system credit. This is not just a borrowing of investment – this is borrowing to survive.”

Mukherjia referred to a review of the financial stability of RBI (FSR), which draws a terrible picture of the middle -class debt in India:

• 45 % of borrowers in India are pulmonary mortgage, which means that they have poor merit and are at great risk of failure to pay.
• 48 % of the debts taken by these borrowers from mortgage for consumption, not building assets.

“This means approximately half of what these weak borrowers owe to financially is just preserving their daily lives.” “Not for investments, not to create wealth – just to survive.”

5-10 % of India from the middle class in the debt trap

Mukherjia analysis indicates that between 5 and 10 % of the middle -class Indians entered a debt spiral, as they took multiple loans that are not able to pay it completely. He divided it using data from RBI and Bureau Credit Reports:

• 67 % of the middle -class Indians took personal loans.
• 25 % of all borrowers have a credit card, a personal loan and a loan at least one ticket.
• 45 % of the total borrowers are mortgage, and half borrowing is only for daily needs.

“When you put these numbers together, it is clear that 5-10 % of India of the middle class is besieged in debt,” Mukherjia warned. “These are the people who have modest income and who accumulated loans that they cannot simply pay.”

https://www.youtube.com/watch?

Mukherjia warned that this issue will not disappear any time soon. “Every year it passes, this problem will increase, unless it is actively treated,” he said. “If you are an Indian -class Indian who suffers from debt, ask for financial advice before glowing.”