Women are making their mark in India’s startup ecosystem, with around 15% of all such businesses started by them. They increasingly seem to be overcoming one of the biggest barriers to entrepreneurship: access to credit.
In 2022, the number of female borrowers in India rose to 63 million, or 28% of the total, showed a report published by the credit information firm TransUnion CIBIL yesterday (March 6). Their share in semi-rural and rural areas increased to 62%. In 2017-2022, the highest growth in the number of female borrowers occurred in West Bengal (22%), Rajasthan (21%) and Bihar (21%).
“With approximately 63 million female borrowers active in credit as of December 2022, the growth rate of female borrowers (16%) has been faster than that of male borrowers (13%). These data underscore the enormous potential of lenders to provide access to credit to women across India, empowering them while promoting financial inclusion,” the report states.
Women entrepreneurs are increasingly looking for sustainable personal and consumer loans.
“Information on the type of credit products used by women reveals that consumer-oriented credit products, such as personal loans and sustainable consumer loans, 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,” he said.
This reflects female entrepreneurshipthe report says, adding that the number of women applying for business loans has tripled in the past five years.
In addition, government plans like Nari Shakti (women’s power), which offer subsidized loans at less than market rates, have helped them realize their entrepreneurial aspirations. By 2030, up to 30 million businesses owned by women are expected to create nearly 150 million jobs in India.
Women have a higher share in gold lending and microfinance
Until 42% of India’s gold loans are used by women, another report from credit bureau CRIF High Mark showed. Women also borrow more for education, accounting for 35% of total disbursements. Almost all (99%) of the more than $16.5 billion in microfinance loans were also used by women, The footprint reported.
Importantly, female borrowers have a better risk profile, according to the TransUnion CIBIL report. In 2022, up to 57% of them had a higher credit score compared to 51% of men.