India’s Evolving Credit Market: Rising Women Borrowers and Expanding Financial Inclusion

NITI Aayog has released the second edition of its report titled “From Borrowers to Builders: Women and India’s Evolving Credit Market”, highlighting a significant rise in women’s participation in the country’s formal credit ecosystem.

• Publication: The report is published in collaboration with the Women Entrepreneurship Platform (WEP), TransUnion CIBIL, and MicroSave Consulting.
• It builds on efforts under WEP’s Financing Women Collaborative (FWC), launched in 2025 to address gaps in gender-disaggregated financial data and improve understanding of women’s financial behaviour.

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About the Report

• It underscores a major shift in women’s financial participation – from basic access to more advanced engagement within formal credit systems.
  • It provides both quantitative and behavioural insights. 
• Data Base: Prepared using credit bureau data of around 16 crore women, along with primary research involving rural nano-entrepreneurs.

Key Highlights of  Report

• Women’s Credit Portfolio: Women borrowers now account for a credit portfolio of ₹76 lakh crore – constituting 26% of India’s total system credit.
• Growth in Outstanding Credit: Women’s total outstanding credit has grown nearly 4.8 times – from ₹16 lakh crore in 2017 to ₹76 lakh crore in 2025. 
  • Credit-Active Women Borrowers: During the same period, the number of credit-active women borrowers grew at a compound annual growth rate (CAGR) of 9%, while credit penetration among women increased from 19% to 36%.
• Untapped Potential: With an estimated 45 crore credit-eligible women in India, the report highlights vast untapped potential for further expansion.
• Commercial Credit Growth : Credit to women business borrowers recorded a CAGR of 31% between 2022 and 2025, significantly outpacing the overall commercial credit growth rate of 17%.
• Upward Mobility in Credit Systems: Gradual transition among microfinance borrowers, with 19% of active borrowers now accessing individual retail and commercial loans—indicating upward mobility within the credit ecosystem.
• Geographical Spread: Women’s access to credit is expanding geographically, with northern states such as Bihar and Uttar Pradesh witnessing notable growth alongside traditionally strong regions in southern and western India.
• Credit Products: In terms of credit products, personal and gold loans remain the most widely used, while housing loans are gaining traction suggesting a rise in asset ownership among women.
• Formalisation of Credit Access: The role of rapid digitization across identity systems, payments, underwriting, and loan servicing in reducing barriers to credit access. 
  • These advancements are helping women transition from informal borrowing channels to formal financial systems.

Challenges for Women in Credit Market

• Concerns over credit quality and over-indebtedness: Rapid expansion of microfinance has raised the risk of multiple borrowings and repayment stress, particularly among low-income women. 
  • For instance, in some regions, SHG members rely on multiple microfinance institutions simultaneously, increasing default vulnerability.
• Limited asset ownership affecting collateral availability: Women’s lower ownership of land and property restricts their ability to access secured loans. For example, in rural India, land titles are predominantly held by men, limiting women’s eligibility for formal credit.
• Financial literacy gap: Lack of awareness about formal financial products and credit management reduces effective utilization. 
  • For instance, many women borrowers depend on intermediaries or informal advice, leading to suboptimal borrowing decisions.

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Way Forward

• Enhance Financial literacy among Women: Implement targeted awareness programmes through SHGs and community institutions to improve understanding of credit products, repayment discipline, and digital financial tools. 
  • For example, initiatives like financial literacy camps under PMJDY can be scaled up.
• Promote collateral-free and affordable credit: Expand access to low-interest, collateral-free loans through schemes like MUDRA and Stand-Up India, enabling women to overcome asset ownership barriers.
• Strengthen SHG and microfinance ecosystems: Deepen the SHG-Bank linkage model to ensure timely and affordable credit while preventing over-indebtedness through better monitoring and regulation.
• Encourage women entrepreneurship: Provide skilling, incubation, and market linkages to support women-led enterprises. For instance, capacity-building under the Women Entrepreneurship Platform can be expanded.

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