Number Of Women Borrowers Grew More Rapidly Than Men In Last 5 Years, Have Better Risk Profile: Study

The growth rate of women borrowers has been more rapid than men, showing huge potential for lenders to provide credit access and drive financial inclusion.
Number Of Women Borrowers Grew More Rapidly Than Men In Last 5 Years, Have Better Risk Profile: Study

The number of women borrowers in India has increased at a compound annual growth rate (CAGR) of 15 per cent over the last five years compared to 11 per cent for males, TransUnion CIBIL said in its annual report on Monday.

The “retail credit insights” on women borrowers, published each year ahead of International Woman’s Day on March 8, showed that the share of women borrowers has increased from 25 per cent in 2017 to 28 per cent in 2022, with India’s rural and semi-urban areas leading the growth rebound.

Of around 454 million adult women in India, only about 63 million were active borrowers as of calendar year (CY) 2022. The report said that credit access for women (percentage of borrowers to total adult population) grew from 7 per cent in CY2017 to 14 per cent in CY2022.

The growth rate of women borrowers has been more rapid at 16 per cent compared to men at 13 per cent, showing the huge potential for lenders to provide credit access to women while driving financial inclusion.

Women Borrowers Have Better Risk Profile

Speaking on the findings, Harshala Chandorkar, the chief operating officer of TransUnion CIBIL, said: “The marked evolution of women borrowers as active participants in India’s credit market bodes well for the government’s financial inclusion mandates for traditionally underserved segments such as women.

“Customised products for women borrowers across socio-economic categories, age groups, and geographic locations will further empower them to fulfill their economic goals while catalysing steady portfolio growth for credit institutions.”

The report highlights that women borrowers have a better risk profile. In CY2022, 57 per cent of women borrowers had a “prime3 score” compared to 51 per cent of male borrowers.

Consumption-led credit products, like personal loans and consumer durable loans, are popular among women borrowers as more women become financially independent and seek credit opportunities to fulfill their life goals.

The study further shows that women seeking business loans have more than tripled in the last five years (CY2017 to CY2022), a reflection of the growth of women-led startups in India.

During this period, the share of women in the overall business loan portfolio has increased by 32 per cent in CY2022 versus 20 per cent in CY 2017. In the home loan segment, women borrowers grew by 6 per cent in the same period.

More Women Borrowers In Semi-Urban And Rural Locations

Women borrowers in semi-urban and rural locations grew at a CAGR of 18 per cent between CY2017 and CY2022, compared to 14 per cent in metro and urban areas. The overall share in semi-rural and rural locations has risen to 62 per cent.

Among the top 12 states, West Bengal (22 per cent), Rajasthan (21 per cent), and Bihar (21 per cent) have seen the highest growth in women borrowers between CY2017 and CY2022.

TransUnion’s study on new-to-credit (NTC) borrowers shows that the highest proportion of women borrowers has availed of agricultural and consumer durable loans. Furthermore, the number of first-time credit seekers increased from 32 per cent in CY2017 to 34 per cent in CY2022.

In CY2022, over 8.2 million women accessed their CIBIL report, compared to 5.7 million in CY2021. The highest number of self-monitoring women borrowers were from Maharashtra (16 per cent), followed by Karnataka (10 per cent).

The study showed that between 2021 and 2022, the number of new self-monitoring women borrowers grew by 83 per cent compared to male consumers at 60 per cent.

Sujata Ahlawat, senior vice president and head of DTC Interactive at TransUnion CIBIL, said: It “reflects improved financial awareness and credit consciousness. It also demonstrates that women are cognizant that credit discipline matters and are taking proactive measures to improve their credit profile.”

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