Context:

Tamil Nadu has the highest share of women borrowers in the country at 44%, according to the report "From Borrowers to Builders: The Role of Women in India's Financial Growth Story" released recently by NITI Aayog.

·        The Report has been published by TransUnion CIBIL, NITI Aayog's Women Entrepreneurship Platform (WEP) and Microsave Consulting (MSC).

Southern states have higher share of women borrowers:

Southern states have higher share of women borrowers. As of December 2024, 44% of women in Tamil Nadu had active loans, while the figure was 41% in Andhra Pradesh, 35% in Telangana and 34% in Karnataka. The national average is 31%.

The number of women active borrowers in Tamil Nadu has grown at a 10% compound annual growth rate (CAGR) over the last five years.

Situation in other states:

Compared to other states, Maharashtra recorded a share of women in loans at 30%, Rajasthan at 26%, Madhya Pradesh at 25% and Uttar Pradesh at 23%.

Although the number of active women borrowers in Rajasthan, Uttar Pradesh and Madhya Pradesh has grown rapidly in the last five years, the share of these states still remains low at the national level.

Increase in women's credit monitoring:

As of December 2024, 2.7 crore women monitored their credit score and report with CIBIL, an increase of 42% over the previous year. Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh and Telangana contributed 49% of total female self-monitoring in 2024, with Tamil Nadu alone accounting for 11%.

The number of self-monitoring women was highest in the southern region, which reached 1.016 crores with a 46% increase from December 2023 to December 2024.

NITI Aayog's initiative to promote financial inclusion:

The CEO of NITI Aayog said that financial institutions need to create inclusive financial products according to the needs of women.

For this, the Financing Women Collaborative (FWC) initiative is being run, so that more and more financial institutions can be added to this mission of financial inclusion of women.

Why is credit score monitoring important for women?

·        Better financial independence: Women are becoming able to take their own financial decisions.

·        Ease of getting loans: Having a good credit score can easily get them a personal loan, business loan or home loan.

·        Financial stability: With increased financial understanding, women can save and invest better.

·        Promoting women entrepreneurship: The loan process can become simpler for women who take up entrepreneurship.

Government initiatives

The Government of India and the Reserve Bank of India (RBI) have directed banks to provide more credit to women and ensure that their share in bank credit is 5% or more. According to the State Level Bankers Committee, Tamil Nadu, 21.12% of total bank advances in Tamil Nadu have been provided to women.

This report is a positive sign for women playing a vital role in financial inclusion and increasing credit flow.