More credit to women, with better payback record – The Hindu BusinessLine

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A sand sculpture by artist Manas Sahoo at Puri beach in Odisha to mark the International Women’s Day The Hindu

A sand sculpture by artist Manas Sahoo at Puri beach in Odisha to mark the International Women’s Day The Hindu | Photo Credit: BISWARANJAN ROUT

Two studies say women emerginga strong class of borrowers

Women are playing an increasingly significant role in the country’s financial economy. Two separate studies — by TransUnion CIBIL and CRIF HighMark — show that more women are taking loans.

They are emerging as a strong class of borrowers, with better credit profile and lower delinquency rates, said an analysis by TransUnion CIBIL, which found a strong credit uptake by women in both, urban and rural parts.

The analysis also revealed that the number of women borrowers in the country has increased at a CAGR (compound annual growth rate) of 19 per cent in the last five years compared to 14 per cent for male borrowers during the same period. In 2021 alone, the number of women borrowers grew at 11 per cent compared to the 6 per cent growth rate of male borrowers.

Credit penetration

In 2016, a quarter of all borrowers were women. That has increased to 29 per cent in 2021.

“Increasing participation of women in India’s credit market bodes well for macroeconomic indicators on financial inclusion and social development while strengthening pathways to achieving our economy’s Rs. 5-lakh-crore growth objective,” noted Harshala Chandorkar, Chief Operating Officer, TransUnion CIBIL.

However, the average loan size came down marginally to Rs. 1,45,600 in 2021 from Rs. 1,48,700 in 2016. Gold loan, consumer durable loan and personal loan were the top three products availed by women borrowers in 2021.

But, according to the CRIF HighMark study, women are availing themselves of more home and business loans than personal and auto loans. The share of female borrowers availing auto loans, business loans, home loans and personal loans has increased by 2 per cent, 1 per cent, 2 per cent and 1 per cent, respectively, over the last one year, it noted.

The TransUnion CIBIL study said growth in women borrowers has remained strong despite the aftermath of the pandemic.

More disciplined

Women borrowers had a better record of re-paying than men. “The 90+ days-past-due (DPD) consumer-level delinquency rate for women borrowers stands at 5.2 per cent across retail credit products compared 6.9 per cent for men, indicating that women tend to be more disciplined borrowers,” TransUnion CIBIL said.

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