Women in India Drive Financial Inclusion with Credit Monitoring Surge

A NITI Aayog report highlights a significant rise in Indian women monitoring credit scores, reflecting enhanced financial awareness. The study, from TransUnion CIBIL, MSC, and NITI Aayog's WEP, indicates a 42% rise by December 2024, spotlighting increased female participation in the financial sector, especially outside metro regions.

Women across India are increasingly engaging with financial systems by actively monitoring their credit scores, according to a report released by NITI Aayog. On Monday, NITI Aayog CEO BVR Subrahmanyam unveiled the report, titled "From Borrowers to Builders: Women's Role in India's Financial Growth Story," highlighting the rising financial awareness among women.

As per the December 2024 data, a whopping 27 million women have taken up credit monitoring, marking a 42 percent increase over the previous year. The report, published by TransUnion CIBIL, NITI Aayog's Women Entrepreneurship Platform (WEP), and MicroSave Consulting (MSC), shows that women's share of the self-monitoring credit base rose to 19.43 percent, up from 17.89 percent in 2023.

Interestingly, more women from non-metro regions are monitoring their credit scores than their counterparts in metro areas. These efforts culminated in a growth rate of 48 percent in non-metro regions compared to 30 percent in metros. The states of Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, and Telangana accounted for nearly half of all self-monitoring women, with the southern region leading substantially.

Northern and central states like Rajasthan, Uttar Pradesh, and Madhya Pradesh are experiencing the highest compounded annual growth rates in active women borrowers over the past five years. Notably, since 2019, women's participation in business loan origination and gold loans has climaxed, showing respective increases of 14 and 6 percent. Women are projected to represent 35 percent of business borrowers by December 2024.

Nevertheless, challenges persist, including credit aversion, poor banking experiences, barriers to credit readiness, and issues concerning collateral and guarantors. During the report launch, Subrahmanyam emphasized the crucial role of financial access in empowering women entrepreneurs, noting, "Access to finance is essential for women's entrepreneurship." The WEP is actively forging a more inclusive ecosystem that enhances financial literacy and access to credit.

The NITI Aayog CEO underlined the importance of inclusive financial products and policy initiatives that address structural barriers. The Financing Women Collaborative (FWC) initiative seeks more participation from financial sector stakeholders to fulfill this mission. Meanwhile, Anna Roy, Principal Economic Advisor at NITI Aayog, stressed that fostering women's entrepreneurship opens doors to massive employment opportunities for Indian women.

Anna Roy further outlined the dual benefits of promoting women's entrepreneurship, which could potentially generate employment for millions and significantly boost women's participation in the labor force, driving equitable economic growth. This rise in credit awareness and improved credit scores is paving the way for financial institutions to offer gender-smart products tailored to women's unique needs.

(With inputs from agencies.)