Women Borrowers form 28% of India’s Retail Credit

 Women Borrowers form 28% of India’s Retail Credit Consumer Base, show TransUnion CIBIL Insights

Financial Inclusion of women on the rise with 47 million active women borrowers, increasing by a compound annual growth rate (CAGR) of ~21% over the last six years

Chennai, March 8, 2021: 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)

1.1 – Share of women borrowers in India’s retail credit market*
Year*	No. of women borrowers (in millions)	Share of women borrowers (%)
2014	14.9	23%
2015	19.8	25%
2016	24.0	25%
2017	29.8	26%
2018	36.2	27%
2019	42.8	27%
2020	47.5	28%

*Based on a 12-month period of data at the end of CY Q3 of each year

 

Personal loans and consumer-durable loans in top demand for women borrowers

Insights on credit demand show that more than 29 million women applied for credit opportunities in CY 2020 (Jan-20 to Dec-20) indicating an increase of ~26% CAGR growth in the credit demand by women borrowers over the last six years. Further insights based on product type show that there is a marked preference in demand for personal loans and consumer-durable loans by women borrowers, with ~38% of enquiries by women coming for these two loan products over  CY 2020(Jan-20 to Dec-20). Important to note is that data from earlier years (2014, 2015 and 2016) shows that home loans were highest in demand for women consumers. (Refer Table 1.2)

1.2 – Product-wise demand for credit by women borrowers in India Enquiries for loan types by women consumers (%)
Loan Type	2014	2015	2016	2017	2018	2019	2020
Personal Loan	12%	14%	13%	14%	17%	23%	19%
Consumer Durable Loan	8%	10%	12%	17%	19%	19%	19%
Home Loan	19%	18%	16%	15%	13%	9%	11%
Credit Card	11%	11%	12%	13%	12%	13%	12%
Others	49%	47%	46%	42%	40%	35%	39%

*Based on 12 month period of data for CY (Jan-Dec) of each year

“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.

This increased credit consciousness is also evident from the fact that women now constitute 12% of self-monitoring consumers, an increase from 10% in 2018. State-level data analysis indicates that the highest number of self-monitoring women consumers are from Maharashtra (18%) followed by Tamil Nadu (11%) and Karnataka (10%). (Refer Table-1.3)

 

1.3 – Top 5 states for self-monitoring women credit consumers, as of 31 December 2020
State	Self-monitoring women credit consumers (%) –
Maharashtra	18%
Tamil Nadu	11%
Karnataka	10%
Telangana	7%
Uttar Pradesh	7%
Delhi	7%

 

Credit consciousness fosters credit discipline and improves access to economic opportunities

Insights from CY 2020 show that within three months of checking their CIBIL score and report, 22% of self-monitoring women consumers opened at-least one loan account or credit card. Women consumers also show better credit history as compared to men, with the average CIBIL Score of an Indian woman consumer being 719 – higher than that of an average male consumer at 709. Additionally, 61% of the women consumers in TransUnion CIBIL’s consumer credit bureau have a CIBIL score greater than 720, whereas only 56% of male consumers have a CIBIL score greater than or equal to 720.

“Increased credit consciousness leads to a positive credit behavior as consumers understand the impact of their credit activity on their CIBIL score and access to finance. With many credit institutions now offering better terms and conditions and lower rates of interest for borrowers who have a higher CIBIL score, it is advantageous for consumers to monitor and maintain a healthy credit profile. TransUnion CIBIL is committed to ensuring that each consumer is reliably and safely represented in the marketplace so that they are able to access economic opportunities easily,” concludes Sujata.

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