how to increase cibil score about CIBIL and financial literacy

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A survey by Home Credit Survey, reveals some shocking facts like:

  • Only 22% of borrowers aware of their CIBIL score in Patna which is the lowest literacy level, followed by Kolkata (25%) and Mumbai (25%), by research conducted to understand Financial Literacy levels
  • 76% of borrowers do not know their interest amount on loan, by research findings.
  •  Mutual Fund: only 50% of respondents aware of Mutual Funds;
  • Kolkata takes the first place in the research with 66% of people aware of Mutual Funds, followed by Delhi at 61% and Mumbai at 53%
  • 74% of respondents are there those are willing to take Financial Literacy lessons to handle their finances better.

Home Credit India, a local arm of the international consumer finance provider with operations over Europe and Asia, has conducted research across 7 cities. So is to understand the levels of financial literacy amongst the borrowers. Approximately,1,000 respondents were interviewed in the survey.

The Survey says, due to the ongoing pandemic has had an unprecedented impact on the economy and people’s livelihood across the strata of society. New reforms, policies are being announced regularly, but for the common man, it is not easy to understand their various financial aspects.

For becoming an inclusive nation, Financial Inclusion and Financial Literacy are important and critical.

how to increase cibil score ?

Only 52% of the borrowers understand what is a CIBIL score is and its importance.

(CIBIL score is considered as a parameter that helps in understanding borrowers’ eligibility for loans). Interestingly they have already taken a loan but not a knowledge of CIBIL.

Only 68% of the respondents did not know their CIBIL score.

Only 22% of borrowers aware of their CIBIL score in Patna which is the lowest literacy level, followed by Kolkata (25%) and Mumbai (25%).

76% of the borrowers are not aware of the interest amount on their loans. They know the EMI amount to be budgeted monthly but unaware of the interest amount separately.

Only 17% of borrowers in Delhi, 19% in Jaipur, and 24% in Mumbai knew the interest amount on their loans.  

They are not aware of calculating the interest of the loan, only 43% across the 7 cities said that they only had partial knowledge of how their interest on the loan was calculated.

50% of the respondents were found aware of Mutual Funds. 66% of people of Kolkata are aware of Mutual Funds followed by 61% in Delhi, 53% in Mumbai, 50% in Patna, 43% in Bhopal, 41% in Hyderabad, and only 37% in Jaipur.

A whopping 95% of the borrowers said that they fully understood their Bank Passbook. Bhopal leads and gets first palce with 98%, followed by Jaipur (97%) and Delhi (96%).  

Given the low awareness rate, it was heartening to learn that 74% of the respondents would like to receive financial literacy lessons to be able to manage their finances better.

Interestingly, only 44% of respondents know the difference between Credit and Debit card. only 87% know the meaning of a savings account and 80% understand the meaning of a current account.

When comes to women, they have even a lower understanding of finances as compared to men.

Home Credit provides 11.3 million customers with a large number of hassle-free financing options that can be availed from a strong network of around 31,500 points-of-sale (PoS), across 350 cities. The company is committed to drive credit penetration and broaden financial inclusion through responsible lending in the country.

Addressing about the research, Mr. Marko Carevic, Chief Marketing and Customer Experience Officer said; “Financial Literacy is imperative for economic progress of any country. This research on Financial Literacy is aimed to understand our customers knowhow of their finances management better. The research revealed that a majority wants to understand their finances better and are keen to take financial literacy lessons. This help us draw a meaningful financial literacy program. That will further help our people build an understanding of basics of Personal Finance like budgeting, they are aware of good debt vs bad debt, when to borrow etc. As a responsible lender we regularly engage with our customers and the community at large to educate them about important aspects of financial management and borrowing. Our financial education program Paise ke Pathshala creates an ecosystem here people will make informed, thoughtful, and beneficial financial choices at every stage of their lives. The program is aimed to encourage people, to set life and financial goals, and provide them with the basics of money management to increase their financial awareness and success. We wish to broaden financial inclusion in India.”

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