Women Borrowing sees an upsurge post pandemic

Women's financial inclusion can have a significant impact on their households as well as the country's economy.

Credit Bureau CRIF High Mark, recently compiled comparison of Indian women borrowers having availed various types of loans before and after the pandemic.

The report delves into the Indian women borrower segment and their growing credit awareness. The data shows that there has been a gradual increase in the number of loans availed and the portfolios diversified by women.

The report also states the lending community is stepping up to recognise the female borrower segment by offering various incentives.

While there exists a significant gender gap between male and female borrowers, with females accounting for only 18% of the Rs. 4,57,041 crore Auto loans and 23% of the Rs. 9,96,474 crore Business Loans. The report does indicate that gaps do persist in the use of financial services, and the country must respond with gender-sensitive policies.

The following are some of the key data points for the fiscal years 2019 to 2021 as of December 2021.

  • Business loans (BL) are more popular among Indian women than auto loans (AL)
  • Female borrowers’ AL and BLincreased Y-o-Y by 14% and 13%, respectively.
  • While the average ticket size for AL among female borrowers has increased BL have fallen.
  • Female borrowers in the South have greater credit exposure than those in the West and North. However, Maharashtra was the top state for female borrowers seeking AL and BL and also having the greatest credit exposure.
  • The top five states for Auto Loans are Maharashtra, Tamil Nadu, Kerala, Telangana, and Karnataka, and the top five states for Business Loans are Maharashtra, Tamil Nadu, Karnataka, Gujarat, and Kerala, with the portfolio outstanding for female borrowers increasing by 10% year on year in both the categories.
  • In the first three quarters of FY 2021-22, the amount disbursed (in crores) to female borrowers increased in all four product categories (housing loan, personal loans, AL & BL) compared to first three quarters of the preceding year.
  • The Public sector banks continue to have the highest loan value share, followed by private banks and NBFCs, while NBFCs has the highest volume share of loans disbursed to female borrowers.
  • Female borrowers between the ages of 26 and 35 have the highest volume share of disbursements (36.3 percent) across all four product categories. However, the share has decreased from 39.5 percent prior to the pandemic. This is followed by a decrease in the percentage of total loans disbursed to people aged 36 to 50. However, the share of loans obtained by female borrowers under the age of 25 increased from 13% to 17%.
  • The proportion of female borrowers in New To Credit (NTC) originations (by loan volume) has risen from 19.8 percent to 21.2 percent. Also, the share of NTC originations (Volume) among female borrowers increased from 14.7 percent to 36.3 percent.

Women’s financial inclusion can have a significant impact on their households as well as the country’s economy. In emerging economies, women reinvest 90% of their income in human services such as education, food, and wellness.

As a country, we should take steps to effectively bridge the gender gap in achieving financial inclusion.