CIBIL report indicates credit uptake among women grows by 22% annually since 2019

The number of women availing credit in India has surged at a compound annual growth rate (CAGR) of 22% between 2019 and 2024, according to the latest report “From Borrowers to Builders: Women’s Role in India’s Financial Growth Story” by TransUnion CIBIL, Women Entrepreneurship Platform (WEP) of NITI Aayog, and MicroSave Consulting (MSC). While consumption loans remain the most preferred credit product among women, the report reveals a significant rise in women availing business loans, signalling a shift towards entrepreneurship and financial independence.

Business Loans on the Rise: A Fourfold Jump Since 2019

In 2024, approximately 37 lakh new loan accounts were opened by women for business purposes, including business loans, commercial vehicle loans, and loans against property, with total disbursements reaching ₹1.9 lakh crore. This marks a dramatic increase from 8 lakh new loan accounts and ₹0.7 lakh crore disbursed in 2019. Despite this growth, business loans still constitute only 3% of the overall loans availed by women borrowers, indicating significant untapped potential.

Manoj Kumar Sharma, Managing Director of MSC, highlighted this trend, stating, “The number of women seeking credit has grown at a CAGR of 22% since 2019, with 60% of borrowers coming from semi-urban and rural areas. This underscores a deepening financial footprint beyond metro cities.”

Consumption Loans Remain Dominant, But Business Loans Gain Traction

While consumption loans continue to dominate women’s credit portfolios, the share of women holding business loans has seen the highest growth. By December 2024, 16% of women borrowers held active business-purpose loans, up from 9% in December 2019. In contrast, the share of women with consumption loans grew to 36% in 2024 from 33% in 2019, while agriculture and gold loans combined accounted for 34% of women borrowers, up from 32% in 2019.

This shift reflects a growing trend of women leveraging credit to start or expand their businesses, particularly in semi-urban and rural areas, which account for 60% of women borrowers. The rise in business loans is a positive indicator of women’s increasing participation in entrepreneurship and their ability to access formal credit to fuel their ventures.

Younger Women Lead the Charge in Credit Awareness

The report also highlights that younger women, particularly Gen Z and Millennials, are at the forefront of this financial revolution. The number of Gen Z women monitoring their credit scores surged by 56% year-over-year (YoY), while Millennial women saw a 38% increase. Together, these two groups now account for 74% of all women actively monitoring their credit.

This growing awareness is a clear indicator of women’s increasing participation in the formal financial system, driven by their entry into the workforce and entrepreneurial ventures. Bhavesh Jain, MD & CEO of TransUnion CIBIL, emphasized the importance of this trend, stating, “The number of women self-monitoring their credit information report and score grew by 42%, from 18.94 million in December 2023 to 26.92 million in December 2024. While this is an encouraging trend, this must continue for women to progress from being participants to leaders in India’s economic story.”

Challenges Remain: Barriers to Credit Access

Despite the encouraging trends, women borrowers continue to face challenges in accessing credit. Issues such as credit aversion, poor banking experiences, and constraints around collateral and guarantors remain significant barriers. The report calls for more gender-intelligent financial products tailored to women’s unique needs, along with policy initiatives to address structural barriers.

Anna Roy, Principal Economic Advisor at NITI Aayog and Mission Director of WEP, stressed the need for a collaborative approach, stating, “Encouraging women entrepreneurship is a viable strategy for accelerating equitable economic growth. Promoting women’s entrepreneurship could create employment opportunities for 150 to 170 million people while driving women’s participation in the labour force.”

Regional Insights: Southern States Lead in Credit Monitoring

The report also provides a state-wise breakdown of credit monitoring trends. Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, and Telangana are the top five states with the highest number of self-monitoring women borrowers, accounting for 49% of the total. The southern region leads the way, with 10.2 million women actively monitoring their credit, reflecting a 46% YoY growth. Meanwhile, northern and central states like Rajasthan, Uttar Pradesh, and Madhya Pradesh have seen a high compounded annual growth rate (CAGR) in active women borrowers over the past five years.

The Road Ahead: Building an Inclusive Financial Ecosystem

The report underscores the need for a multi-stakeholder approach to further empower women financially. Initiatives like the Financing Women Collaborative (FWC) under WEP aim to build an inclusive ecosystem that fosters financial literacy, access to credit, mentorship, and market linkages.

B. V. R. Subrahmanyam, CEO of NITI Aayog, emphasized the role of financial institutions in this mission, stating, “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.”

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