The banks, consumer finance firms and retail outlets had joined hands to help the consumers for the purchase of an array of electronic gadgets at ease by providing them with several lucrative offers be it zero down payment plans, no-cost equated monthly instalments (EMI), heavy discounts during the festive season, exchange offers, discounts offered by banks through debit and credit card payments and the list goes on.
But the situation may change in the coming days due to the wide-spreading coronavirus pandemic, which has shrunk the economic activity globally to the worst possible levels.
The impact of coronavirus on the lives of common human beings is worsening daily and this has affected the functioning of several business houses, banks, financial institutions and so on.
The irresistible offer like interest-free financing used to drive the customers to the stores and make them purchase the big-budgeted electronic and home appliances of top brands and helped them to upgrade to premium products easily.
Many consumer finances firms, banks are bracing up to face the new challenge amidst ongoing uncertainty and are likely to tighten the existing terms fearing credit risk which is surging up owing to salary cuts and loss of jobs amidst shrinking economic activity. The retail outlets, as well as consumer finance firms, are likely to roll back the existing zero down payment schemes and no-cost EMI plans for electronic equipment's like air - conditioners, T.V.'s, refrigerators, smartphones, washing machines and so on.
The lucrative offers rolled out so far used to attract customers to go in for the purchase of the products at ease as they could purchase the product right away and could make the payment for the same over a while conveniently, without having to pay any extra cost like interest charges, penalty.
If we look at the zero per cent finance scheme, the manufacturer used to bear the interest cost on the loan amount and the processing fee was either passed on to the end customer or was shared between manufacturer and dealer. The consumer was the ultimate benefiter of purchasing the products on easy instalments as the company used to draw revenues on bulk sales. The risk factor on the part of the manufacturer was higher.
As of now, no changes have been made in the existing policy but in future, there is a likely possibility that some changes are likely to be made fearing credit risk amidst the turbulent economic and financial situation.
Meanwhile, the Bangalore based Unilet outlet and Girias retailers noted that the existing policy of zero down payment schemes and no-cost EMI are ongoing and will continue to be followed until they get notified of any new changes made in the coming days if any.