A study has revealed that Indians pay a third of their salary as loan installments, known as EMIs.
How do Indians spend their money
A recent study by PwC and Perbios has revealed how Indians spend their money.
The study surveyed 3 million people using financial technology services, non-bank financial institutions and other digital platforms.
The study was conducted not only in metropolitan cities but also in tier-III cities. The monthly income of the participants ranged from Rs 20,000 to Rs 1 lakh.
It has been revealed that Indians spend 39 percent of their salary on debt repayments and insurance premiums.
Meanwhile, it has been found that low-income earners are more likely to borrow money from friends, relatives, interest-only lenders or pawn shops than through formal channels like banks.
The report divides expenses into three categories: mandatory expenses, necessary expenses and discretionary expenses.
Repaying loans and paying insurance premiums are classified as mandatory expenses. Online gaming, food ordering, entertainment, etc. are classified as discretionary expenses; and basic household needs such as drinking water, electricity, fuel and medicine are classified as necessities.
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