Did You Know: “India’s personal & MSME debt is a growing concern: ₹30 trillion in personal debt and a staggering ₹70 trillion in MSME debt”.
India’s economic engine thrives on a delicate balance. On one hand, access to credit and loans (debt) fuels the ambitions of millions. It empowers individuals to improve their quality of life, pursue education, own a home, and build a secure future. For Micro, Small, and Medium Enterprises (MSMEs), the backbone of the economy, debt is a crucial tool for growth. It allows them to invest in expansion, hire new talent, and contribute significantly to India’s GDP (close to 30%) and exports (around 45%). This growth in the debt market, driven by financial inclusion, economic expansion, and digital lending platforms, has been instrumental in India’s recent economic success story.
However, on the other hand, this very debt can become a burden if not managed responsibly. A recent World Bank report highlights a concerning trend – household debt reaching a staggering portion of 39% of GDP. The ease of access to credit, fueled by options like Buy Now, Pay Later (BNPL) services, can lead to a dangerous cycle of overspending. This burgeoning debt crisis isn’t limited to individuals; it casts a long shadow over the MSME sector as well.
Understanding the difference between good debt and bad debt is crucial for maintaining a healthy financial life.
Good Debt refers to borrowing that can enhance your financial future, such as mortgages, student loans, business expansion etc. which can lead to increased earning potential or asset appreciation.
Bad Debt typically involves high-interest loans that do not contribute to your financial growth, such as credit card debt used for non-essential purchases.
By distinguishing between these two types of debt and more importantly managing the repayment on schedule, individuals can make informed decisions that keep creditors satisfied and supportive, ultimately avoiding falling into a debt-trap.
Debt is a common reality for many individuals and businesses in India, including Micro, Small and Medium-sized enterprises (MSMEs). This is especially true considering the country’s increasing access to credit. Here’s a glimpse into the current scenario:
MSMEs are the backbone of the Indian economy, contributing around 30% to the country’s GDP and a significant 45% to exports. As of 2023, the total credit outstanding to MSMEs reached an impressive INR 18 lakh crore (USD 240 billion). However, even this crucial sector faces its share of difficulties:
High debt levels can create a ripple effect that reaches far beyond your bank account. Here’s how it can impact your personal and professional life:
To navigate the complexities of debt, it’s essential for individuals and businesses to be prepared for emergencies. Building an emergency fund and securing adequate insurance coverage can provide a safety net, allowing you to manage unexpected expenses without resorting to high-interest loans.
Aim to save at least three to six months’ worth of living expenses in an easily accessible account. Additionally, consider investing in health, life, and property insurance to protect yourself and your assets from unforeseen circumstances. By planning, you can mitigate the risks associated with debt and ensure greater financial stability.
Individuals and MSMEs in India often face a multitude of pain points when it comes to managing their debt. These include:
SingleDebt has become a bright spot of hope for people and small businesses in India in the middle of this scary debt crisis. SingleDebt is the first and only debt management solution provider in the country. SingleDebt’s expertise is rooted in 40 years of global experience, which it leverages to provide tailored solutions to its clients. However, in India, awareness and education about debt management are lacking, unlike in developed nations like the UK and the US. In these countries, measures such as debt consolidation, debt settlement, and credit counseling are widely available and understood.
In contrast, many Indians struggle to find reliable and effective debt management solutions. SingleDebt aims to bridge this gap by providing clear, legal, ethical, and jargon-free advice to individuals experiencing financial difficulties.
SingleDebt has a team of financial experts who provide free debt counseling to help people understand their finances, figure out why they are in debt, and make a plan to get out of debt. This all-around approach gives clients the knowledge they need to handle their money well and make smart decisions.
Based on the individual’s needs, SingleDebt creates custom debt management plans that save them time and money and make the process stress-free. These plans include:
The persistent harassment from creditors and collection agencies is one of the main issues that Indian borrowers face. SingleDebt’s team of paralegals handles all creditor and recovery agent calls, while the customer care team guides individuals on steps to be taken in case of creditor harassment and provides ongoing support.
SingleDebt’s team of in-house advocates fights clients’ legal battles, responds to notices, and even handles cases of damages through creditor or recovery agent harassment.
SingleDebt also offers debt consolidation and settlement services to help individuals and MSMEs manage their outstanding commitments more effectively. Debt consolidation involves combining multiple debts into a single, easier-to-manage monthly payment, saving clients’ money on interest and reducing their total debt load. SingleDebt’s experts negotiate with creditors to find the best possible solution for each client, whether it’s debt consolidation or settlement.
Beyond short-term debt relief, SingleDebt is committed to empowering individuals and businesses with the knowledge and tools to build a strong financial foundation. Our comprehensive approach goes beyond debt management to encompass:
Financial Education: We provide practical guidance on budgeting, saving, and investing to help you make informed financial decisions.
Preventive Measures: We equip you with strategies to avoid falling into debt traps in the future, such as understanding credit scores and managing expenses effectively.
By addressing the root causes of financial struggles and empowering individuals with long-term financial skills, SingleDebt is not only helping clients overcome current debt challenges but also contributing to a more financially resilient India.
SingleDebt is committed to more than just debt management; we’re on a mission to empower individuals and businesses across India to achieve financial freedom. That’s why we’ve launched the #DebtFreeIndia movement.
By joining #DebtFreeIndia, you become part of a growing community dedicated to:
Together, we can create a debt-free India where everyone has the opportunity to achieve their financial goals.
Share your story, inspire others, and become a champion of financial freedom! Join the #DebtFreeIndia movement today.
India’s debt challenge is complex, but there’s hope. With the right tools and support, individuals and businesses can overcome debt. SingleDebt offers innovative debt management solutions and personalized counseling to empower you to regain financial control. By joining the #DebtFreeIndia movement by SingleDebt, you become part of a growing community committed to financial well-being.
Take the first step towards a debt-free future today. Contact SingleDebt for a free consultation and discover how we can help you achieve your financial goals.
SingleDebt specializes in effective debt management solutions, helping individuals and businesses reduce their debt and regain financial stability.
