Last week, the world celebrated International Women’s Day. One of the ways to empower women is to ensure better access to credit. This has far-reaching implications, including giving a boost to women entrepreneurs. Mint explains the significance:
Are women receiving credit on request?
The share of individuals—men and women—in total credit reached a high of 44.4% in September 2022 from 44.1% in June. Credit growth for women outpaced that for men and accounted for 22.6% of borrowings by individuals, according to the Reserve Bank of India. As per TransUnion (Cibil), loan penetration among women rose to 14% in 2022 from 7% in 2017. The report showed that despite the pandemic, the number of women borrowers grew strong. Data shows that women borrowers increased at a compound annual growth rate (CAGR) of 15% over the last five years as against 11% for men.
Are women receiving credit on request?
The share of individuals—men and women—in total credit reached a high of 44.4% in September 2022 from 44.1% in June. Credit growth for women outpaced that for men and accounted for 22.6% of borrowings by individuals, according to the Reserve Bank of India. As per TransUnion (Cibil), loan penetration among women rose to 14% in 2022 from 7% in 2017. The report showed that despite the pandemic, the number of women borrowers grew strong. Data shows that women borrowers increased at a compound annual growth rate (CAGR) of 15% over the last five years as against 11% for men.
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How are Indian states performing?
The share of women borrowers in semi-urban and rural areas grew 18% CAGR between 2017 and 2022 as against 14% in metro and urban areas. Even Rajasthan and Bihar showed commendable growth in credit disbursal to women, based on total credit-active borrowers. While West Bengal saw a growth of 22%, both Rajasthan and Bihar grew at 21%.
What tops women’s loan priorities?
While the share of consumer loans—meant for personal and consumer durables—taken by women is on the rise, a substantial part of the credit facility availed by women is business loans. This reflects a growing number of women entrepreneurs—a big help for a country that’s moving ahead as an economic power. Between 2017 and 2022, women seeking business loans have more than tripled. Also, housing loans are seeing a rise in women borrowers. This is in line with the government’s inclusion plan.
What more can be done?
Women business clinics could be set up on the lines of agri-clinics to identify potential entrepreneurs, especially in villages and tier 3 cities. These may be mobilized on the lines of SEWA and Lijjat Papad, as women cooperatives and self- help groups. Banks for women should reach out to prospective entrepreneurs. Niti Aayog has started a women entrepreneurship platform, to connect them with sponsors. B-schools could start training more rural women.
Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH
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