SUCCESSFUL credit applications of women borrowers grew 48 per cent between 2015 and 2018, much faster than men's at 35 per cent, though men accounted for a much larger consumer base, says a report by Transunion Cibil, a credit information company.
According to Cibil data, 8.6 million new-to-credit women borrowers are opening new loan accounts per year. Two-third of these women are from Maharashtra and four southern states Tamil Nadu, Kerala, Andhra Pradesh and Karnataka.
"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," said Harshala Chandorkar, COO, TransUnion CIBIL.
Education, more working women
One out of every four borrowers is a woman today. This ratio may change soon with the number of credit- worthy women increasing at a much faster pace than men. Better education, and higher participation in the labour market will ensure women take their own financial decisions
Gold loans (or loan against gold) still lead at 56.4 million accounts, though the demand has fallen by 13 per cent in 2018, followed by business loans. However, women's demands for consumer loans, personal loans and two wheeler loans have been increasing year-on-year, growing 31 per cent, 19 per cent and 14 per cent, respectively between 2017 and 18, Cibil said.In terms of risk profiles among the states, Tamil Nadu and Kerala have the lowest borrowing risk in the country with an average Cibil score among women of 781. Interestingly, data captured shows that financial prudence and the average Cibil score among all women increases with age. Millennial women (under 35 years) had an average credit score of 773, while women between the age group 35-45 had a score of 776, and those above the age of 45 years had the highest average score of 785. The average Cibil score among all Indian women consumers is 770-plus, it said.
A good credit score can help consumers gain access to better credit offers faster, and lenders typically consider a credit score above 750 ideal.
"The increase in credit demand and uptake by women is an opportunity for the credit industry to customise products and services that can cater better to the financial requirements of women borrowers. It is encouraging to observe that a high number of business loans originate from states which have the most number of female MSME owners. Women-oriented financial inclusion policies of the government have also helped catalyze this growth," Chandorkar said.
Sujata Ahlawat, VP and Head – Direct to Consumer interactive, TransUnion CIBIL, said, "We have already seen about 38 per cent of women borrowers monitor their Cibil score regularly which implies that credit discipline is becoming a priority for them. Good credit behavior is also rewarded by lenders who are playing a vital role in bringing more and more women into the credit landscape by offering preferential interest rates for them."