Younger generation drives online loan boom

Easy money can make life sweet, but borrowers may experience stress and suffering. Zhang Yi reports.

While their parents scrimp and save, putting every possible penny in the bank, the younger generation are more at ease with adopting luxurious lifestyles and spending as they wish, even with borrowed money.

In May last year, Xu Na hired a personal trainer for two months at a cost of about 5,000 yuan ($744), which was almost equivalent to her monthly salary as an office assistant in Fuzhou, Fujian province.

The cost didn't deter the 26-year-old, though. She borrowed the money through Jiebei, an online provider of small loans operated by Alibaba's Ant Financial Services Group. Under the terms of the loan, she was allowed to repay the debt in installments over six months.

More loans followed through Jiebei. In June, she borrowed 3,000 yuan to pay for an English course, and in August she obtained a further 5,000 yuan for plastic surgery to give her double-fold eyelids, which she considers more beautiful. In total, she owed 13,000 yuan.

According to a report by Zhaopin, an online recruitment platform in Beijing, about 22 percent of 16,000 white-collar workers it surveyed last year were in debt, while about 20 percent had savings ranging from 10,000 yuan to 30,000 yuan.

"In addition to their salary, which determines how much they can borrow, more young people are using credit services, which directly affects the amount they are able to save," the report said.

Overspending

"I never hesitate when I want to buy something I like, because I want to live in the present and treat myself well," said Xu, who has worked for four years but doesn't have much money left each month after paying her rent and buying daily necessities.

A report by Ant Financial, which is best-known as an online payment platform, underlines that tendency, noting that last year about 56 percent of people age 35 or younger had no savings.

For the 44 percent who have started saving, the average amount they can put away per month is just 1,389 yuan, according to the report, based on 280,000 responses.

Moreover, a report released by Haier Consumer Finance Co, a provider of financial services, showed that those with an annual income of 80,000 yuan or less accounted for about 80 percent of the 4.5 million people in more than 300 cities who used credit services last year.

Those born in the 1990s accounted for about 43.5 percent of the total, while the proportion of those born in the 1980s was 36.7 percent, according to Haier.

After graduating in July, Deng Yu started work as a lawyer's assistant in Shanghai, earning 5,500 yuan a month. His basic living costs are between 3,000 and 3,500 yuan a month, including rent of 1,800 yuan for a bedroom of about 8 square meters and a small, shared living space, and buying three meals a day - often takeout fast-food.

"My living expenses can't get any lower. I live near my office in downtown Shanghai, so the rent is a little high, and I don't have time to cook because I usually work overtime and feel exhausted afterward," the 27-year-old said.

Deng usually spends the rest of his income on hanging out with friends at weekends or buying tickets for the theater. In January, he flew to Dubai for a weeklong vacation.

"I don't want to lower my standard of living, and spending is a good way to relax. However, because I don't have any savings, I sometimes worry about emergencies that could arise in the future," he said, adding that he believes his salary will rise.