The survey, jointly conducted by KarmaLife, a financial solutions provider for gig and blue-collar workers, and Catalyst Fund, a global accelerator that supports inclusive tech innovators in emerging markets, finds that almost 90% of the gig workers run out of their salaries before the end of the month, when key expenses come due, which leads to a strong preference for smaller ticket loans, especially at short repayment tenures.
Seven in 10 gig workers are interested in instant loans while only 14% of gig workers own a credit card.
The survey also evidenced the hand-to-mouth finances of most digital gig workers, who spend a significant part of their earnings on essential household expenses and working assets. The most frequently cited expenses were household consumables, fuel and mobile bills, altogether comprising an average monthly outlay of Rs. 9,000. Loan repayments / EMIs and rent also constitute over Rs. 9,000 and Rs. 6,000 in outlay, respectively, for almost half the gig workers.
Less than a quarter reported educational fees and remittances as an expense, though it was a significant outlay for those who incurred it.
53% of gig workers support their parents, whereas 25% support their children. 73% send money to their families on a regular basis, ranging from once per month to a few times a month. The survey conducted shows that gig workers who are supporting only their parents have been contributing a large part of their income towards them. 70% of the workers that support families typically contribute less than 5,000.
Approximately 52% of the gig workers put money aside as emergency funds in the last one year. The top three reasons to save are for medical emergencies, children’s education, and a new home. Even though losing income and the inability to earn are worries for most gig workers, only about a third have self-purchased insurance, mostly life cover. 80% of gig workers do not have medical insurance.
“Small ticket and short cycle liquidity is a large unmet need for the majority of India’s blue-collar workforce. While lending business models have focused on larger and longer-term loans, if this credit is provided sustainably by linking it to their earning patterns, it could be instrumental in enabling them to mitigate their debt cycles and become more self-reliant. Further, also giving them the ability to save small amounts in liquid assets along with relevant micro-insurance will help many unlock future aspirations without compromising their resilience,” Rohit Rathi, CEO and co-founder, KarmaLife.
175 gig workers were surveyed for this study.
KarmaLife works with major digital gig platforms across segments like ride-sharing, food-tech, e-commerce, logistics, flexi-staffing, and others.