Access to credit is an indicator of business and other financial activity. Going by this, women have increased their participation in credit. In the calendar year 2021, there were 54 million active women borrowers. This is much higher than the 22.5 million in 2016. This is a compounded annual growth rate (CAGR) of 19 per cent, which makes women borrowers a segment that lenders need to pay more attention to. This and other findings of a TransUnion Cibil report on participation of women in India's retail credit market show similar trends.
In this study, retail credit includes home loans, loan against property, auto loans, two-wheeler loans, personal loans, credit card consumer durable loans, education loans, gold loans and loans for construction equipment and commercial vehicles. Of these, personal loans (43 per cent) were the most popular among women borrowers in 2021 followed by consumer durable loans (19 per cent).
While the number of women borrowers has increased tremendously, their share in the total number of borrowers remained a low 29 per cent in 2021. This is not much higher than the 25 per cent share in 2016. However, the number of credit applications from women increased to 55.3 million in 2021 versus just 16.3 million in 2016, which is a high CAGR of 28 per cent.
The report finds that the credit quality of women borrowers is higher than that of men–53 per cent of the women borrowers were in the prime score range while only 47 per cent men were in this high range (prime score range: 731-790+). Most women borrowers repay loans on time. The consumer level 90 days-plus delinquency level is 5.2 per cent for women borrowers while it is 6.9 per cent for men borrowers.
In the same year, around 5.7 million women accessed their Cibil credit scores and reports. The share of self-monitoring women, which is women who check their own credit scores, was a not-so-high 17 per cent, though higher than the 14 per cent in 2020. Nevertheless, 40 per cent of the women who check their own scores made efforts to improve their credit profile and score, the report stated.
Middle-aged women, age group of 45 plus years, formed the biggest share among women borrowers at 38 per cent. This was followed by the 35 to 45 years age group at 29 per cent share and 32 to 35 years at 15 per cent. There are fewer younger women as borrowers, possibly due to lower income or lesser awareness. Only 6 per cent of the borrowers were in the 18 to 25 years age group and 11 per cent in the 25 to 30 years group.
According to the study, Gujarat saw the highest growth in women borrowers long dash 23 per cent cagr in 5 years. The most women borrowers, 8.52 million, were from Tamil Nadu.