TransUnion CIBIL and Digital India’s Common Service Centers (CSCs) have celebrated the first year of their partnership by providing over 150,000 consumers, primarily from rural India, with easy access to their CIBIL Score and Credit Report. Announced in July 2020, the collaboration helps consumers check their CIBIL Score and Report at Common Service Centers (CSCs).
Fostering trust through consumer awareness across rural India
Aimed at increasing credit consciousness in rural and semi-urban areas, 72%* of the consumers who accessed their CIBIL Score and Credit Report at the CSCs hailed from non-tier 1, 2, and 3 cities. The pan-India partnership saw the largest count of consumers opting to check their CIBIL Score and Reports come from the north-zone (33%), while the east, west and south zones contributed 27%, 25% and 15%, respectively.
While 81% of these consumers had a 3-digit numeric CIBIL Score, 19% were not eligible for a CIBIL Score as they may not have any credit history on the consumer bureau. Additionally, out of those who were eligible for a 3-digit numeric CIBIL Score, 62% had a Score of 720+; 18% had a score ranging from 680-719 and 20% had a score between 300 and 679. The average CIBIL Score was 721.
Demographic analysis revealed that 68% of these consumers were Millennials (born 1982 – 1996), 22% were non-Millennials (this includes Gen X and older), while 9% were Gen Z (born after 1996).
|Table 1.1 – Regional split of consumer base|
|Region||Percentage of the total consumer base checking CIBIL Score and Reports via CSC||Average CIBIL Score|
Empowered consumers can transact with confidence
This pioneer collaboration has enabled consumers to access their credit profiles, understand the importance of their CIBIL Scores and Credit Reports, and empowered them to utilize formal credit opportunities. State-level data analysis indicated that the highest number of consumers who used this facility came from Uttar Pradesh (16%), followed by Maharashtra (12%) and Haryana (7%).
|Table 1.2 – Top 5 states of credit consumers who opted for their CIBIL Scores and Credit Reports from CSCs|
|Top 5 states||Percentage of the total consumer base|
Credit profile awareness directly proportional to improvement in CIBIL Score
Speaking on these findings, Sujata Ahlawat, Vice President and Head, Direct-to-Consumer Interactive, TransUnion CIBIL, said: “TransUnion CIBIL and CSC are focused on building credit awareness to drive the financial inclusion of every consumer across the country. Through this collaboration, we aim to reach out to the last-mile consumers in regional and rural areas, providing them with easy access to their CIBIL Scores and Credit Reports at their local CSCs. Within just one year of its operation, we have seen an increase in consumer awareness as well as how consumers are using these opportunities to meet their financial requirements.”
Insights show that consumers have worked towards improving their credit profile within six months of checking their CIBIL Score and Credit Report, with 44% of respondents showcasing an improvement in their CIBIL Score, out of which 46% improved their score by more than 20 points. This improvement in credit behavior may be attributed to consumers adopting more credit-conscious habits such as paying their credit dues on time, availing credit opportunities with care and monitoring their credit report and score regularly.
|Table 1.3 – Improved CIBIL Scores within 6 months of first checking|
|Improvement in CIBIL Score (points)||Percentage of consumers who improved their score|
This indicates that a large percentage of consumers who access their score are aware of the importance of their credit profiles and the role of their CIBIL Score and Credit Report in helping them get access to credit, and how improving it can lead to wider financial opportunities.
Insights on action taken by consumers within 90 days of checking their credit profile showed that 26% of all consumers went on to apply for a new credit line, while 39% of them went on to enquire for a loan or credit card.
Insights based on product type show that there is a marked preference in demand for personal loans and consumer-durable loans across age groups and regions.
|Table 1.6 – Product preferences in different age groups|
|Consumer Durable Loan||22%||21%||16%||20%|
“The type of credit being availed by consumers in rural and semi-urban regions showcases their evolving needs and requirements. This data also reflects the growth of India’s credit market which now provides access to various credit opportunities, across both secured and unsecured products, even in non-tier 1, 2 and 3 cities, towns and villages”, explains Sujata.
Growth in credit activity as an indicator of financial wellbeing
Commenting on the growth seen in credit consciousness and awareness at the grassroots level, Dr Dinesh Tyagi, MD, CSC e-Governance Services India said: “Low awareness about credit health in rural communities has been a cause of concern as these consumers are unable to access the financial opportunities that come with having a good CIBIL Score. Our joint effort is aimed at bridging this gap and helping rural consumers become financially confident and credit-savvy. It gives us immense happiness to see the fruits of this collaboration come alive.”
“Increased credit consciousness leads to positive credit behavior as consumers understand the impact of their credit activity on their CIBIL Score and access to finance. With many credit institutions offering better terms and conditions and lower rates of interest for borrowers with a higher CIBIL score, it is advantageous for consumers to monitor and maintain a healthy credit profile. TransUnion CIBIL is committed to ensuring that each consumer is reliably and safely represented in the marketplace so that they can access economic opportunities easily,” concludes Sujata.