Ravi Chandran
Borrower demand in Asia has increased since the beginning of the pandemic by 46%
According to statistics of the international holding Robocash Group, the average sum requested by borrowers in Asia has increased since the beginning of the pandemic by 46%. At the same time, the share of male borrowers and the average age of applicants have grown as well.
Borrower demand increased despite coronavirus restrictions reducing people’s incomes
In Asia, Robocash Group operates in the Philippines, Vietnam, Indonesia and India. It has revealed that the average amount requested by Asian borrowers has grown by 46% since February. Obviously, coronavirus restrictions have reduced people’s income, and increased the need for additional funds. The underconsumption has become an additional incentive to borrow.
At the same time, the proportion of male applicants in the Asian markets of Robocash Group increased from 65.8% in February to 66% between March and October, and to 68.3% in November. Thus, amid the unstable situation, men look for options to solve current financial issues more actively.
Borrower demand especially increased among male borrowers
There is an especially noticeable prevalence of male borrowers in India. There were 89% of them between February and October and 90% in November, which is explained by the socio-cultural model of the society. An exception is Vietnam, where the number of male applicants decreased from 72% in February to 70% between March and November. However, this can be attributed to changes in the structure of new and repeated borrowers. The share of new customers grows proportionally, whereas the group of repeated clients remains predominantly male.
Borrower demand increased because of repeated customers
As for the age of applicants, on average, it increased from 31.5 years in February to 31.9 in November, which corresponds to the natural ageing of the audience, a significant part of which are repeated customers. At the same time, the most obvious age increase was in India – from 30.7 to 31.8 years. This emphasizes that older population becomes more involved in alternative lending than youth, which is traditionally most consumer-active.
It may seem odd for customers to borrow money when they have already got personal savings. But they usually saved that money for a reason — perhaps to fund children through education or provide for your retirement. Whatever that reason is, if you tie up that cash in your business, it’s not available for the original purpose. Taking out credit for your business offers a number of benefits and can improve your chances of commercial success.
Most financial institutions and non-traditional lenders disclose their minimum requirements for lending. If you meet a lender’s minimum qualifications and want to see estimated rates and terms, you can pre-qualify for financing. But pre-qualification is not the same as putting in an application for personal loans. You may pre-qualify for a loan and yet your loan application may be rejected once you put in a formal application – and the more formal personal loan applications you put out, the more the impact is on your credit score.
This is one good reason why you need to work with trusted loan specialists. Loan specialists are able to not only pre-qualify you with multiple lenders and compare rates and terms, they are also able to get you the best personal loans which has costs and payments that fit into your budget.
To lower the cost of borrowing, try to convince your lender to give you a better rate. You should negotiate with your lender and they may be willing to cut the interest rate to secure your business, and so the loan will cost you less. If you are uncomfortable about negotiating, you should engage the services of a loan specialist.
Loan specialists will not only be able to negotiate a better rate for you, they will also be able to help you compare the best personal loan offers from among the different ones given by the many banks. It also makes sense to engage loan specialists because their services are usually free.
A successful business has to borrow money because before a single sale can be made, there needs to be something to sell. Every business needs some form of investment before it can start trading. This could be as simple as a computer, a telephone and an internet connection. But most need more: stock, premises, marketing and something to pay the staff, even if it’s a sole trader.
The money for this could come from a personal loan taken out by the business owner or other flexible sources of finance such as credit cards. The money may even be borrowed from friends, family or effectively from the business owner themselves.
Typically, suppliers need to be paid before customers settle their debts. This puts continual pressure on cash flow. To keep this cycle moving, and to avoid running out of money, demands that a certain amount of money is available to the business at all times — working capital.
Over time, the business can finance working capital out of profits, but this only comes after a period of successful trading. If the business is growing quite fast, the capital required could always be ahead of the surplus generated from trade, meaning continual borrowing is needed.
This is one reason why many firms of all sizes continue to use credit, even when they’ve been trading for years. They use the funds to generate enough profits to more than cover the cost of borrowing.
Taking out credit, whether it’s a business loan, invoice finance or an overdraft, allows them to invest in more sales, creating more profit. Successful businesses spot opportunities in the market and borrow the funds they need to seize the moment.
