Key Points
- Women borrowers have a lower loan default rate than men, at 1.9% vs 2.5% in FY23.
- The number of women borrowers grew by 18% in 2023, compared to 13% for men.
- The average loan size for women borrowers has increased across major retail loan products.
- Government programs like Jan Dhan and Mudra Yojana are helping women become more financially included.
- Women’s share of household credit and deposits is steadily increasing, with more women benefiting from financial initiatives.
- Self-help groups and joint liability groups are seen as low-risk for lenders, with women borrowers in these groups having a good repayment record.
- The RBI is working to close the gender gap in finance with targeted policies and fintech innovations.
Looma News
Lenders are now viewing women borrowers as less risky compared to men when it comes to loan defaults. Data shows that women defaulted on loans at a rate of only 1.9% in FY23, while men’s rate was 2.5%. This has led lenders to focus more on offering loans to women, especially in retail loans and e-commerce. In 2023, the number of women borrowers grew by 18%, outpacing the 13% growth in male borrowers. Additionally, the average loan size for women has risen across various major retail loan products.
The rise in women borrowers is largely due to better access to credit, government programs, and more women getting involved in e-commerce. Schemes like Pradhan Mantri Awas Yojana, Pradhan Mantri Jan Dhan Yojana, and Pradhan Mantri Mudra Yojana have helped increase financial inclusion for women. As of November 6, 2024, over 53.95 crore Jan Dhan accounts were opened, with 56% of those accounts belonging to women. Women’s share of total household loans also rose to 10.9% in June 2024, up from 10.3% the previous year, showing their growing role in the financial sector.
Women borrowers, particularly those in self-help groups and joint liability groups, are considered low-risk by banks due to their strong repayment records. Loans in these groups are often used for productive purposes, which helps ensure higher repayment rates. This is also reflected in the increasing share of women in household sector deposits, which reached 20.6% in June 2024, up from 20.3% the previous year.
RBI Governor Shaktikanta Das has emphasized that the financial sector plays a key role in reducing the gender gap. He called for policies that improve women’s access to finance, such as creating financial products tailored to women and using fintech. The RBI is also working to create more job opportunities for women in financial institutions and support women entrepreneurs through government-backed programs and bank-specific initiatives aimed at female-led businesses.
