Women Borrowers In India Grow 22%, Led By Rural, Semi-Urban Areas: Report

Women borrowers in India have grown at a compound annual growth rate of 22% over the last five years, with the majority hailing from semi-urban and rural areas, a new report revealed on Monday.

More women are not only availing loans but also actively monitoring their credit scores, signaling a rise in financial awareness.

The report, From Borrowers to Builders: Women's Role in India's Financial Growth Story, was released by NITI Aayog Chief Executive Officer BVR Subrahmanyam and published by TransUnion CIBIL, the Women Entrepreneurship Platform of NITI Aayog, and MicroSave Consulting.

While women are increasingly seeking credit, the bulk of their borrowing remains consumption-driven. In 2024, personal finance products—such as personal loans, consumer durable loans and home ownership—accounted for 42% of total loans, while 38% of borrowings were against gold. In contrast, business loans made up just 3% of total loans availed by women.

Despite this, there has been a notable increase in entrepreneurial credit demand. The number of business loan accounts opened by women has grown 4.6 times since 2019, though they still represent only a small portion of total credit. Women's share in business loan origination has risen by 14% since 2019, while their share in gold loans has increased by 6%, with women now accounting for 35% of business borrowers.

As of December 2024, 27 million women were actively monitoring their credit, marking a 42% year-on-year increase. Their share of India's total self-monitoring credit base rose to 19.43% in 2024, up from 17.89% the previous year.

Notably, 60% of women borrowers are from semi-urban and rural areas, underscoring a deeper financial footprint beyond metro cities. Additionally, Gen Z women are leading the charge in credit monitoring, with a 56% year-over-year increase in their numbers.

More women from non-metro regions are self-monitoring their credit than those in metro areas, with growth rates of 48% in non-metros compared to 30% in metros.

States such as Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, and Telangana accounted for 49% of all self-monitoring women borrowers, with the southern region leading at 10.2 million women borrowers. Meanwhile, Rajasthan, Uttar Pradesh, and Madhya Pradesh recorded the highest growth rates in active women borrowers over the past five years.

Releasing the report, NITI Aayog CEO Subrahmanyam emphasised the critical role of access to finance in empowering women entrepreneurs. He highlighted the Women Entrepreneurship Platform as a key initiative working towards financial literacy, credit access, mentorship and market linkages for women.

"However, ensuring equitable financial access requires a collective effort. The role of financial institutions in designing inclusive products tailored to women's needs, along with policy initiatives that address structural barriers, will be instrumental in accelerating this momentum," he said.

Anna Roy, principal economic adviser at NITI Aayog and mission director of WEP, underscored the importance of women's entrepreneurship in driving economic growth.

"It also serves as a viable strategy for accelerating equitable economic growth. Promoting women's entrepreneurship could create employment opportunities for 150 to 170 million people while driving greater participation from women in the labour force," she said.

(With inputs from PTI)