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Credit where it’s due: how to empower women
Summary
One of the ways to empower women is to ensure better access to creditLast 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.
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
