A study by CIBIL shows that 53% of female borrowers had a prime score (731-770) and above compared to 47% for male borrowers last year.

More and more women are opting for personal loans and sustainable consumer loans as they enter the workforce, become financially independent and seek a higher standard of living. As they generally show better financial discipline and have higher credit scores than men, they are easily able to obtain loan approval. The emergence of new-age lenders has also helped them on this journey.

A study by CIBIL shows that 53% of female borrowers had a prime score (731-770) and above compared to 47% for male borrowers last year. Even the consumer-level default rate over 90 days for female borrowers is 5.2% for retail products, compared to 6.9% for male borrowers. In fact, a CIBIL score above 750 can help consumers get quick loan approval, and banks charge a lower interest rate for a higher credit score.

Growth in the use of credit

The study shows rapid growth in the use of credit by women in rural and urban areas. The number of female borrowers has shown a compound annual growth rate of 19% over the past five years. The share of female borrowers increased to 29% to 54 million in 2021 from 25% in 2016. Credit penetration for women—percentage of borrowers relative to the total adult population—increased from 6% in 2016 to 12% in 2021.

The study shows the footprint of female borrowers in semi-urban and rural areas. expanding at a CAGR of 21% between 2016 and 2021, compared to 16% growth in metropolitan and urban areas. The overall share of female borrowers in semi-rural and rural areas increased to 62%.

Harshala Chandorkar, Chief Operating Officer, TransUnion CIBIL, says women borrowers are creating a niche in the credit industry and, when well supported by the credit industry and policy makers, can contribute significantly to economic resurgence and financial inclusion.

Credit Awareness

Last year, over 5.7 million women accessed their CIBIL score and report. In terms of the type of loans used by women borrowers, personal loans and durable consumer loans top the list with 43% borrowers and 19% a durable consumer loan. The study shows that after checking their CIBIL score, 40% of women worked on improving their credit profile and improving their credit score. Among self-monitored consumers who improved their CIBIL score, 43% improved their score by more than 20 points.

Experts say that the interest rate on home loans for women is always lower, regardless of their marital status. State governments also give them a 1-2% stamp duty concession. With a good credit score, financial profile, stable income stream, and even tax exemptions, the stage is set for more women to opt for expensive home loans in the future.