Introduction
Women in India are increasingly transforming from passive borrowers to active economic builders, driving financial inclusion and entrepreneurship. The NITI Aayog report, "From Borrowers to Builders: Women’s Role in India’s Financial Growth Story," highlights a significant rise in women’s financial participation. Published in collaboration with TransUnion CIBIL, Women Entrepreneurship Platform (WEP), and MicroSave Consulting (MSC), the report underscores the crucial role of financial literacy, credit access, and entrepreneurship in women’s economic empowerment.
Rising Credit Participation Among Women
India has witnessed a remarkable shift in women's financial behavior, with increasing credit awareness and participation. Key findings include:
The number of women borrowers has tripled between 2019 and 2024.
60% of women borrowers hail from semi-urban and rural areas, indicating deeper financial penetration.
Women’s share in business loans rose by 14% and in gold loans by 6% since 2019.
More women entrepreneurs are availing credit, leveraging financial tools to scale their businesses.
Growing Awareness and Credit Monitoring
A striking trend is the increased credit monitoring by women, demonstrating enhanced financial awareness:
In 2024, 27 million women actively monitored their credit, a 42% increase from 2023.
Women in non-metro regions (48%) are more engaged in credit monitoring compared to metro counterparts (30%).
62% of self-monitoring women fall into prime or above credit bands, reflecting improved financial discipline.
Regional Trends in Women’s Financial Inclusion
Southern States Lead: Tamil Nadu, Karnataka, and Telangana have the highest number of women borrowers, benefiting from robust financial inclusion initiatives.
Rapid Growth in Northern & Central States: Uttar Pradesh, Rajasthan, and Madhya Pradesh recorded the fastest rise in live women borrowers over the past five years.
Urban-Rural Divide: While urban centers continue to see strong participation, rural areas are witnessing rapid financial adoption, propelled by government schemes and microfinance.
Success of Financial Inclusion Initiatives for Women
Several government and private sector initiatives have contributed to the financial upliftment of women entrepreneurs:
Women Entrepreneurship Platform (WEP): Provides mentorship, market access, and financial literacy support.
Financing Women Collaborative (FWC): Encourages gender-intelligent financial products and fosters public-private partnerships.
Pradhan Mantri Mudra Yojana (PMMY): In FY 2023-24, ₹2.22 lakh crore in loans were disbursed to 4.24 crore women entrepreneurs.
PM SVANidhi Yojana: As of December 2024, ₹5,939.7 crore was provided to 30.6 lakh women street vendors, enabling them to sustain and expand their businesses.
Udyam Registration: 40% of Micro, Small & Medium Enterprises (MSMEs) in India are now owned by women, showcasing the growing entrepreneurial spirit.
Challenges Hindering Women’s Financial Access
Despite progress, multiple challenges persist that hinder women’s full-fledged participation in the financial ecosystem:
1. Credit Aversion & Limited Financial Literacy
Many women hesitate to take loans due to concerns about repayment, financial instability, and lack of awareness about credit benefits.
Financial literacy remains low, especially in rural areas, limiting women’s ability to leverage credit effectively.
2. Collateral & Guarantor Issues
79% of women-owned businesses rely on self-financing due to the lack of collateral and guarantees required for formal credit access.
Traditional lending practices often require male guarantors, restricting independent financial decision-making.
3. Banking & Bureaucratic Hurdles
Women often face bureaucratic red tape, documentation challenges, and a lack of advisory support in financial institutions.
Limited access to formal banking services in remote areas reduces financial engagement.
4. Lack of Tailored Financial Products
Many existing loan products do not cater to women’s unique financial needs, requiring flexible repayment structures and non-collateral options.
Limited insurance and pension products designed specifically for women entrepreneurs and workers.
5. Poor Credit Readiness & Documentation Issues
Around 30% of individual women entrepreneurs lack proper financial records, making it difficult to secure credit approvals.
Absence of formal bookkeeping practices hinders financial credibility.
The Way Forward: Enabling Women’s Financial Empowerment
To unlock women’s full economic potential, targeted reforms and innovative financial solutions are required:
1. Reimagining Credit Risk Assessment
Leveraging AI, big data, and alternative credit scoring models to reduce gender biases in lending.
Promoting digital footprints and transaction histories as credible creditworthiness indicators.
2. Gender-Intelligent Financial Products
Introducing tailored loan products with flexible repayment terms and lower interest rates for women entrepreneurs.
Expanding non-collateral loan options for women MSMEs and startups.
3. Strengthening Financial Literacy & Credit Readiness
Nationwide financial literacy campaigns focusing on rural and semi-urban areas.
Encouraging digital bookkeeping and financial management training programs for women.
4. Expanding Support Networks & Ecosystems
Strengthening mentorship programs under WEP and FWC to provide networking, training, and capital access.
Enhancing collaboration between banks, NBFCs, and fintech companies to promote women-centric financial services.
5. Increasing Gender Representation in Finance
Encouraging more women to take leadership roles in financial institutions.
Designing financial policies and products through a gender-inclusive lens.
Conclusion
Women in India are steadily transforming into economic builders, leveraging financial tools for business growth, stability, and independence. While the progress in financial inclusion and credit awareness is commendable, significant challenges persist. Addressing these barriers through innovative financial products, inclusive policies, AI-driven credit assessments, and robust support networks will empower women further, strengthening India’s economic growth story. The journey from borrowers to builders is pivotal in achieving financial equity and sustainable economic development.
MCQs for UPSC CSE
Which of the following organizations published the report "From Borrowers to Builders: Women’s Role in India’s Financial Growth Story"?
(a) RBI
(b) TransUnion CIBIL, WEP, MSC
(c) SEBI
(d) World Bank
Answer: (b)
What percentage of women borrowers are from semi-urban and rural areas?
(a) 50%
(b) 60%
(c) 70%
(d) 80%
Answer: (b)
Which financial scheme has disbursed ₹2.22 lakh crore in loans to women entrepreneurs in FY 2023-24?
(a) PM Awas Yojana
(b) Udyam Registration
(c) PM Mudra Yojana
(d) PM Kisan Samman Nidhi
Answer: (c)
Mains Question
Women’s financial inclusion is key to India’s economic growth. Analyze the impact of financial participation on women’s empowerment and suggest measures to enhance their role in India’s financial ecosystem. (250 words).
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