Latest insights from TransUnion CIBIL indicate sustained growth in the participation of women borrowers in India’s retail credit market, which now includes more than 47 million active women borrowers. Over the last six years, the share of women borrowers grew to ~28% in Sep-20, up from ~23% in Sep-14, indicating increasing inclusion of women in India’s credit market. This represents a CAGR of ~21%. Male borrowers have increased at a CAGR of ~16% during the same period. In terms of sanctioned loan amount, women borrowers account for INR 15.1 lakh crores of retail loans, which has also grown at 12% CAGR over the last six years.
Improved access to economic opportunities have catalyzed financial inclusion of women
Speaking on these findings, the Chief Operating Officer of TransUnion CIBIL, Ms. Harshala Chandorkar, said: “Increased participation of women in the labour force, coupled with progressive government initiatives and policies on improving access to economic opportunities for women, has driven the growth of women borrowers in India’s retail credit market. Factors like lower stamp duty for women consumers on home purchase in some states along with lenders offering better terms and conditions and lower rate of interest for women borrowers, have further catalyzed this growth. Also the fact that women have a higher average CIBIL score than that of men indicates that women have a better credit history and therefore lesser probability of default which makes them better customers for banks and credit institutions. Improved and easier access to economic opportunities has catalyzed financial inclusion of women in India”
Insights on credit availed by women consumers show that ~45 million new loan accounts were opened by women borrowers during the 12-month period of Oct-19 to Sept-20, marking a 17% CAGR growth over the last six years (i.e. compared to credit availed in period of Oct-13 to Sep-14). The number of new loan accounts opened by male borrowers has increased at 16% CAGR during the same period. At the end of Q3 2020, there were more than 47 million active women borrowers (with at least 1 live loan and/or credit card account). (Refer table 1.1)
“This marked shift in the type of credit women are seeking reflects the evolution in India’s credit market which now provides quick and easy access to multiple types of credit opportunities, across both secured and unsecured products. Data-driven lending and credit information solutions support for lending processes and policies have enabled lending institutions to quickly and confidently assess a consumer’s credit history and risk potential in order to make astute credit decisions. This capability has fueled the surge in credit growth, as credit institutions are now able to find and fund good consumers while controlling their portfolio risk,” explains Harshala.
Rising credit consciousness amongst women borrowers – a promising indicator of financial literacy
Along with the growth in the participation of women in India’s credit market, awareness and credit consciousness has also improved with self-monitoring** women consumers growing by 71% between 2018 and 2020. This is more than six times the growth rate of self-monitoring male consumers over the same period.
“With improved levels of education and employment of women across our country, their credit consciousness has also grown. This is corroborated by the fact that we have seen a significant surge in the number of women borrowers who monitor their own CIBIL score and report. This is a promising indicator of increased awareness and financial literacy amongst women,” said Sujata Ahlawat, Vice President and Head – DTC Interactive, TransUnion CIBIL.
