A report published by AI-driven financial wellness platform CASHe reveals that banks remain the most preferred lending avenue among millennials.
According to ‘The Financially Independent Millennial’ report 2022, 41 per cent of millennials secured loans from a bank whereas 35% of the borrowers opted for a digital lending platform.
The pan-India survey was conducted among more than 20,000 customers on the CASHe platform as well as on its newly acquired wealth management platform, Sqrrl.
Reportedly, millennials from more than 80 cities participated in the survey, and it captured their preferences and attitude towards financial and investment matters.
The survey highlighted that lending platforms are rapidly gaining popularity among millennials owing to the relaxed eligibility criteria, bias-free processes, and attractive interest rates.
Additionally, the survey found that over 47 per cent of respondents picked SIP/recurring deposits as their preferred investment plan, followed by 31 per cent of respondents who preferred goal-based savings.
The report added that the cohort’s inclination towards SIP and goal-based investment plans implies their commitment to regular savings.
Furthermore, the study revealed that digital Gold topped the charts with more than 33 per cent of the votes when it came to respondents’ preferences for new-age alternative asset classes.
It was followed by cryptocurrencies (29 per cent), fractional ownership (17 per cent), P2P lending (12 per cent), and US equity investment (9 per cent).
The study highlighted that 43 per cent of respondents across the country mentioned they began making financial decisions independently between the ages of 21 and 25 years, indicating that the millennial generation is evolving and growing to take on additional financial responsibilities.
Following the pandemic, millennials have been more cautious about financial matters. According to the report, the vast majority of respondents (41 per cent) set aside between 10 and 20 per cent of their annual salary as savings.
On the other hand, it was also noted that a sizeable portion of millennials (about 30 per cent) set aside less than 10 per cent of their annual income as savings, which raises concerns about the cohort’s commitment to regular savings.
Further highlighting that millennials are rapidly evolving as ‘forward thinkers’, the study showed that more than 34 per cent of the respondents claimed that they were highly conscious of the matter and have started saving already.
While nearly 48 per cent of the respondents said they have not yet acted in retirement planning, a considerable chunk (23 per cent) aim to kick-start retirement planning soon.
Millennials are entering the club of astute investors that consider both future profits and present tax savings as a result of a growing understanding of tax saving methods and opportunities.
The survey shows more than 56 per cent of respondents reportedly invested in tax-saving strategies, with the remaining respondents found supposedly unaware.
Besides, the cohort has also dealt with the most uncertain economic future of the generation since the onset of the pandemic. The pandemic has caused the majority of millennials to become more cautious about their money.
According to the survey, medical emergencies, accounting for 36 per cent, was the top reason for millennials availing of loans in 2022. This was followed by unplanned expenditure and education accounting for 19 per cent and 14 per cent respectively.