By Mitali Salian
Loan disbursements to women borrowers across different segments have witnessed a 48% growth between 2015 and 2018 against a slower 35% rise in advances to male consumers, who are in fact a larger consumer base, says a TransUnion Cibil study. The study is based on credit information across banks, financial institutions, non-banking financial companies and housing finance companies.
According to TransUnion Cibil COO Harshala Chandorkar: Women-oriented financial inclusion policies of the government have helped catalyse this growth. We expect further growth in credit demand by women borrowers in future based on multiple factors such as rise in education of women, increasing consumption of consumer durables in tier I and tier II markets and an increase in the number of working women.
According to the study, as per a segmental break-up of the disbursal in advances to women over the last four years, loans against gold led at 56.4 million accounts, though demand fell by 13% in 2018, followed by business loans. Meanwhile, demand for consumer loans, personal loans and two-wheeler loans have all witnessed a y-o-y rise, growing by 31%, 19% and 14%, respectively, between 2017 and 2018.
Sujata Ahlawat, V-P and head of Direct to Consumer interactive, said: Banks offering preferential interest rates to women borrowers, also a tell-tale sign of quality of advances to women and risk associated by institutions which is seen by the higher average credit score among women, has also aided the growth in advances to women.
According to the study, the average Cibil score among Indian women consumers stands at 770+ women under the age of 35 years had an average credit score of 773, while women between 35 and 45 years of age had a score of 776, and those above the age of 45 years had the highest average score of 785.
Lenders typically consider a credit score above 750 as an ideal score. The data further reveals that 8.6 million new-to-credit women borrowers are opening new loan accounts per year, and 66% of these women are from five states: Tamil Nadu, Kerala, Andhra Pradesh, Maharashtra and Karnataka.
Interestingly, the annual report for 2017-18 published by the ministry of micro, small and medium enterprises featured a state-wise distribution of proprietary MSMEs by gender of owners that showed a large chunk of southern and North-Eastern states led among those with a higher share of MSMEs with women owners, which also exceeded its share of MSMEs with male owners.
Among all states, West Bengal led with a 23.42% share of MSMEs with female owners against 11.52% of those owned by men. Tamil Nadu stood second with its share among states with women led MSMEs at 10.37% against 7.10% of MSMEs with a male owner. Telangana stood at 7.85% against 3.01%, Karnataka at 7.56%, Meghalaya at 0.32% against 0.15% and Arunachal Pradesh at 0.05% against 0.03%.