More Indian women are seeking business and retail loans, but nearly two-thirds still remain outside the formal credit system
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The most decisive shift in women’s credit participation is visible in business-purpose lending to women which has seen a 7.5 time jump since 2017, accounting for 25 per cent of the overall credit portfolio | (Photo/Pexels)
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Women borrowers in India now hold a credit portfolio of ₹76 trillion — 26 per cent of the total credit in the system. At ₹16 trillion in 2017, it has grown at a compounded annual growth rate (CAGR) of 20 per cent.
According to ‘From Borrowers to Builders: Women and India’s Evolving Credit Market’, a report jointly published in April by NITI Aayog, TransUnion CIBIL, MicroSave Consulting (MSC), and the Women Entrepreneurship Platform, women’s credit exposure has expanded 4.8 times in eight years between 2017 and 2025.
This signals a transition from “access-led inclusion to progression-led participation” and tells the story of how more and more women are moving into higher value retail and business loans.
Yet another study, ‘Women and Finance’ by DBS Bank India Ltd, released in March, says credit penetration among women rose to 36 per cent in 2025. It also says 69 per cent of female entrepreneurs surveyed in urban India are primary decision-makers in financial matters.
Let’s focus on the first study first. It has identified lower entry barriers due to rapid digitisation of the credit process, and graduation beyond entry-level credit towards retail and business-purpose lending as two key reasons behind rising the participation of women in finance. Business loans have emerged as the fastest growing segment for women borrowers, rising from 16 per cent in 2017 to 25 per cent in 2025.
Digitisation across identity, payments, underwriting, and loan servicing is lowering some entry barriers and accelerating women’s transition from informal borrowing to scalable, structured financial pathways.
Between December 2017 and December 2025, the number of credit-active women borrowers rose at a CAGR of 9 per cent. Credit penetration among women, which was 19 per cent in 2017, rose to 36 per cent in 2025 and at least one in three credit-eligible women are now participating in the formal credit system.
The NITI Aayog report, covering the 2017-2025 period, groups women borrowers into three segments: Microfinance entrants, retail-purpose borrowers and business-purpose borrowers. These are three different stages of engagement within the credit ecosystem.
Over this period, the composition of lending has evolved. Retail loans continue to dominate, accounting for 71 per cent of the total credit portfolio of women borrowers. But business loans have registered the highest growth, rising from 16 per cent to 25 per cent of the total portfolio. Microfinance now accounts for just 4 per cent. The growth of this segment is much slower than retail and commercial, signalling rising entrepreneurial participation among women.
Still microfinance remains a key entry point into formal credit for women, with 730 million active borrowers. The segment is stabilising as lenders adopt tighter guardrails and declining new-to-credit originations. Importantly, nearly 19 per cent of active women borrowers now hold retail or commercial loans, reflecting progress beyond small-ticket credit.
Women accounted for 27 per cent of overall retail loan originations in 2025, up three percentage points from 2022. New-to-credit women borrowers represent 38 per cent of retail originations, with many entering through consumption and gold loan products. Retail lending is increasingly acting as a bridge, enabling women to build credit histories and transition towards larger ticket- and asset-based products.
It is no surprise that women demonstrate responsible credit behaviour, with lower delinquency compared with overall new-to-credit borrowings. Younger women are accelerating participation across consumption, gold and vehicle loans, while housing loans continue to remain a significant long-term asset class. Women account for 69 per cent of housing originations when included as co-applicants, up from 63 per cent in 2022.
The most decisive shift in women’s credit participation is visible in business-purpose lending to women which has seen a 7.5 time jump since 2017, accounting for 25 per cent of the overall credit portfolio. Over the past three years, women business borrowers have grown at a CAGR of 31 per cent, nearly double the pace of overall commercial credit growth.
Tamil Nadu accounts for 15 per cent of active women business borrowers and Maharashtra for 11 per cent. Bihar and Uttar Pradesh have recorded higher growth rates, at 59 per cent and 42 per cent CAGR, respectively, over the last three years, indicating rising entrepreneurial participation in northern markets.
Finally, even though 36 per cent credit penetration among women is a good story, nearly two-thirds of credit-eligible women still remain outside the formal system.
Let’s turn to DBS Bank India’s ‘Women & Finance’ report, done with Deloitte Touche Tohmatsu India LLP as the research partner.
Launched ahead of International Women’s Day 2026, the report, “Money Matters: Mindsets, Financial Agency and Behaviour Across Life and Career Stages”, draws on responses from 1,342 women surveyed across North (23 per cent), South (36 per cent), East (14 per cent) and West (27 per cent) India. It reflects the views of women entrepreneurs, high net worth (HNW) women and rural women earners.
Data from the survey suggests that women are increasingly becoming financial decision-makers. Among the women entrepreneurs surveyed, 69 per cent identify as primary decision-makers in financial matters, compared with 60 per cent among rural women earners and 58 per cent among HNW women. The trend is more pronounced with age, particularly among HNW and women entrepreneurs, indicating that confidence and control grow as experience accumulates.
The DBS-Deloitte survey says different segments behave differently and have different priorities.
For instance, 76 per cent of rural women earners feel confident about managing finances, compared with 67 per cent of HNW and 58 per cent of women entrepreneurs. Women who do not make financial decisions independently typically rely on trusted personal relationships for financial advice. Of the HNW women surveyed, 55 per cent turn to their spouse or partner for financial advice or guidance, compared with 50 per cent of women entrepreneurs. This pattern rises to 73 per cent among rural women earners.
Among HNW (64 per cent) and women entrepreneurs (73 per cent), buying a new home or property is a key priority — a strong preference for tangible assets and an affinity for home ownership. In contrast, 73 per cent of the rural women earners surveyed prioritise children’s education first as their goal.
Digital platforms, including apps and websites, are the most preferred channels of engagement for women entrepreneurs (44 per cent) and HNW (29 per cent). HNW women tend to prefer a hybrid approach (36 per cent), combining digital channels with in-person support.
In contrast, rural women earners show a stronger preference for in-person banking, with 47 per cent favouring branch visits. This is driven by trust in face-to-face interactions.
Women entrepreneurs show the highest levels of digital adoption. Among those surveyed in this group, 84 per cent use UPI, and 59 per cent actively use digital financial tools such as banking apps. HNW women reported UPI adoption at 77 per cent, and 52 per cent used digital tools such as savings and banking apps.
Despite high smartphone ownership (82 per cent), adoption of digital financial services is limited among the rural women earners surveyed. Key barriers are low familiarity with apps (44 per cent), fear of online scams (37 per cent), and inconsistent connectivity (31 per cent).
At the Republic Day parade in 2025, the rural development ministry’s tableau on the Lakhpati Didi scheme drew much attention. It showcased women’s economic empowerment through entrepreneurship focusing on the scheme (launched in 2023), which aims to ensure a minimum annual income of ₹1 lakh to members of self-help groups (SHGs).
According to recent government statements, around 30 million women SHG members have become ‘Lakhpati Didis’. The target has been revised to 600 million by 2029.
The writer, a Consulting Editor of Business Standard, is an author and senior advisor to Jana Small Finance Bank Ltd. His latest book is Roller Coaster: An Affair with Banking. To read his previous columns, log on to http://www.bankerstrust.in X: @TamalBandyo
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