Women entrepreneurs in India are more likely to get loans than men

Women are making their mark in India’s startup ecosystem, with around 15% of all such ventures launched by them. They seem to be increasingly overcoming one of the biggest obstacles to entrepreneurship: access to credit.

In 2022, the number of female borrowers in India will rise to 63 million, accounting for 28% of the total, a report released by credit information firm TransUnion CIBIL showed yesterday (March 6). Their share in semi-rural and rural regions increased to 62%. In 2017-2022, the highest growth in women borrowers was in West Bengal (22%), Rajasthan (21%) and Bihar (21%).

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“With approximately 63 million women borrowers active on credit in December 2022, the growth rate of female borrowers (16%) was faster than male borrowers (13%). This data underscores the huge potential for lenders to provide access to credit to women in India, empowering them while driving financial inclusion,” the report said.

Women entrepreneurs are increasingly looking for sustainable personal and consumer loans.

“Insights into the type of credit products available to women show that consumer-based credit products such as personal loans and consumer durables are gaining popularity among them. As more women borrowers enter the workforce and become financially independent, they seek credit opportunities to fulfill their life goals and aspirations,” it said.

This reflects female entrepreneurship, the report said, adding that the number of women seeking business loans has tripled in the past five years.

In addition, government schemes like Nari Shakti (woman power), which offers advantageous loans cheaper than market rates, helped them realize their entrepreneurial aspirations. By 2030, as many as 30 million women-owned businesses are expected to create nearly 150 million jobs in India.

Women have a higher share in gold loans and microfinance

Up to 42% of India’s gold loans are used by women, another report by credit bureau CRIF High Mark showed. Women also borrow more for education, accounting for 35% of total payments. Almost all — 99 percent — of the more than $16.5 billion in microfinance loans also went to women, The Print reported.

Importantly, female borrowers have a better risk profile, says the TransUnion CIBIL report. In 2022, up to 57% of them had a higher credit score, compared to 51% among men.

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