HK gig workers' repayment behaviour in line with wider market: TransUnion

Gig workers, accounting for 13 percent of the domestic workforce in Hong Kong, showed strong repayment discipline, with 95 percent of them sitting in prime or higher credit tiers, according to TransUnion's study.

This figure, compared to 90 percent of the broader credit-active population, challenges the assumption that non-traditional employment equates to higher lending risk.

The gig economy usually refers to a labor market that is characterized by temporary, contract, and freelance jobs rather than permanent positions.

This study, which was conducted in January this year, interviewed 500 gig workers from different industries. 

Most of the gig workers do not rely solely on freelance income, as 89 percent earn a regular salary alongside their side jobs.

The study pointed out that 82 percent of these workers met their obligations without difficulty, slightly outperforming the 80 percent rate seen across the general public.

However, even with their strong profiles, gig workers in Hong Kong face frequent hurdles when trying to access financial products, with nearly half across all age groups reported meeting difficulties from traditional underwriting rules during the credit application process.

Applicants frequently face unfavourable pricing, complex procedures, and rejections because they can not provide standard documentation like traditional pay slips, according to the study.

TransUnion suggests financial institutions will need to look beyond traditional salary assessments, including alternative data to adapt to consumers’ evolving profile and better meet the needs of more Hong Kong consumers.