TransUnion CIBIL Insights Show That Women Exhibit Better Credit Profiles

TransUnion CIBIL Insights Show That Women Exhibit Better Credit Profiles

Womens Day – SM Infographic-01_v3MUMBAI, March 7, 2022: Today, ahead of International Woman’s Day (March 8), TransUnion CIBIL published its annual retail credit insights on women borrowers. Analysis shows rapid growth in credit uptake by women across India’s rural and urban geography. India’s estimated population of 1400* million comprises approximately 435* million adult females of which only about 54 million females are active borrowers. This data brings to the fore the huge potential of providing access to credit for women across India and empowering them while driving financial inclusion.

Women emerging as a powerful consumer segment backed by strong growth, better credit profiles and lower delinquency rates

Insights from the analysis show that the number of women borrowers has increased at a compound annual growth rate (CAGR) of 19% in the last 5 years, compared to a CAGR growth of 14% for male borrowers during the same period. The share of women borrowers has increased to 29% in 2021 – up from 25% in 2016 (see Table 1 - Mapping the emergence of women in India’s retail credit market). Credit penetration for women (percentage of borrowers to total adult population) has improved to 12% in 2021 from 6% in 2016. In terms of total outstanding retail credit1 balances, the share of women borrowers is 23%. Growth in women borrowers has remained strong despite the aftermath of the COVID-19 pandemic, with women borrowers showing a stronger rate of growth at 11% compared to the 6% growth rate of male borrowers through CY 2021.

Speaking on these insights, the Chief Operating Officer of TransUnion CIBIL, Ms. Harshala Chandorkar, said: “Women are making their mark and emerging as a powerful consumer segment in India’s retail credit market backed by strong growth, better credit profiles and lower delinquency rates.  With the rapid evolution in India’s credit sector, women can now more easily avail affordable credit opportunities to fulfill their primary life goals like education, home, car, entrepreneurship and also other aspirational goals like holidays, smartphones and high end consumer durables. Increasing participation of women in India’s credit market bodes well for macroeconomic indicators on financial inclusion and social development, while strengthening the pathways to achieving our economy’s five trillion INR growth objective.”

Further insights show that women borrowers have a better score distribution. As of CY 2021, 53% of women borrowers had a score of prime2 and above compared to 47% for male borrowers. The 90+ days-past-due (DPD) consumer-level delinquency rate for women borrowers’ stands at 5.2% across retail credit products compared to that of their male counterparts at 6.9%, indicating that women tend to be more disciplined borrowers.

Delving into the insights on the type of credit products availed by women reveals that personal finance products like personal loans and consumer durable loans are gaining popularity. As more women borrowers are entering the workforce and becoming financially independent, their need for credit to meet their living expenses is also increasing. With the emergence of new-age lenders and increased geographical penetration, access to these products has also improved.

Increasing footprint of women borrowers in semi-urban and rural locations

TransUnion CIBIL insights also indicate expansion in the footprint of women borrowers in the semi-urban and rural locations, with a CAGR of 21% between CY 2016 and CY 2021 as compared to 16% growth in metro and urban regions. The overall share of women borrowers in these semi-rural and rural locations, compared to urban, has risen to 62%, marking an increase of 5% during the same period.  

“Women borrowers are creating a niche in the credit sector, and when supported well by the credit industry and policy makers can significantly contribute to economic resurgence and financial inclusion in the country. Fortifying avenues of financial independence for women, enhancing credit opportunities as well as the credit-seeking experience, will go a long way in further empowering women in India,” expressed Chandorkar.

Credit consciousness amongst women growing rapidly  

In CY 2021 more than 5.7 million women accessed their CIBIL score and report. Along with increased awareness and credit consciousness, the participation of women in India’s credit market has also improved with the share of self-monitoring3 women consumers reaching 17% in CY 2021, up from 14% in CY 2020.

“Women are proving to be better borrowers since they display higher credit consciousness and better credit scores as compared to their male counterparts.  With more and more women becoming financially independent, they must also work towards building a stronger credit profile in order to avail access to credit whenever they need it. Regular monitoring of their CIBIL report and score will also help significantly towards maintaining financial discipline and planning towards financial goals,” advised Sujata Ahlawat, Senior Vice President and Head – DTC Interactive, TransUnion CIBIL.

In terms of the type of loans availed by self-monitoring women borrowers, personal loans and consumer durable loans top the list, with 43% availing a personal loan and 19% availing a consumer durable loan.

Insights from CY 2021 show that after checking their CIBIL score, overall, 40% of self-monitoring women consumers worked towards improving their credit profile and bettering their CIBIL score. Among the self-monitoring women consumers who improved their CIBIL score, 43% improved their score by over 20 points.

“Our insights suggest that credit consciousness is directly proportional to positive credit behavior. As consumers become increasingly aware of the importance of a good CIBIL score, they tend to work towards repaying their credit dues on time and make more informed decisions on loans and credit cards. TransUnion CIBIL is committed to driving awareness of credit management amongst consumers and assisting them in building a good credit profile for quick and affordable access to finance,” concludes Ahlawat.

Table woms day


>> Learn more about the CIBIL Score at www.cibil.com

 * World Bank population estimate

1 Retail credit includes the following products: home loan, loan against property, auto loan, two-wheeler loan, commercial vehicle loan, construction equipment loan, personal loan, credit card, business loan, consumer durable loan, education loan and gold loan.

2Credit Tiers based in CIBIL Score range: NTC: No Score, Subprime:300-680, Near Prime: 681-730, Prime: 731-770, Prime Plus: 771-790, Super Prime: 790+

3Self-monitoring consumers are consumers who check their own CIBIL score and report.