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Financial distress and COVID-19: evidence from working individuals in India

Kirti Goyal (Department of Management Studies, Malaviya National Institute of Technology, Jaipur, India)
Satish Kumar (Department of Management Studies, Malaviya National Institute of Technology, Jaipur, India)
Purnima Rao (Fortune Institute of International Business, New Delhi, India)
Sisira Colombage (Associate Professor and Discipline Head, Department of Accounting and Finance, Federation Business School, Federation University Australia, Ballarat, Australia)
Ankit Sharma (Department of Finance and Accounting, Chandragupt Institute of Management Patna, Patna, India)

Qualitative Research in Financial Markets

ISSN: 1755-4179

Article publication date: 25 June 2021

Issue publication date: 27 July 2021

1381

Abstract

Purpose

This study aims to explore the impact of the containment measures during COVID-19 on individuals’ finances, financial resilience during such distress and identifying the most financially vulnerable among them. Tracing such impact during the pandemic has been challenging due to a lack of representative data. This paper addresses this gap in the present study.

Design/methodology/approach

A survey has been conducted using a structured questionnaire containing various items that portray the impact on income, spending, saving, investment, borrowing, insurance and retirement. The sample consists of 699 respondents and purposive and snowball sampling has been used for data collection. The results are presented and analyzed using infographics and frequency distributions. This study conducts an analysis of variance and Chi-square tests for significance.

Findings

This paper finds a fall in income and limited ability to cope with the current economic conditions. The survey highlights inadequate savings and insurance, weak retirement planning, outstanding loans and under-diversified investments inhibiting financial resilience even among the higher-income group. Particularly, lower-income strata, women and not much educated are most financially vulnerable. Further, no substantial financial benefits have been received from the government and people rely on their usual income sources.

Originality/value

To the best of the authors’ knowledge, this is the first study that measures the pandemic’s impact on personal finances, especially in connection with a developing economy like India. Policy interventions are critical to the millions for whom financial literacy is required now more than ever.

Keywords

Citation

Goyal, K., Kumar, S., Rao, P., Colombage, S. and Sharma, A. (2021), "Financial distress and COVID-19: evidence from working individuals in India", Qualitative Research in Financial Markets, Vol. 13 No. 4, pp. 503-528. https://doi.org/10.1108/QRFM-08-2020-0159

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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