Despite being proven to be better repayers of loans, only 12 per cent of women in India have availed a loan, according to a report by TransUnion Cibil. This number which is still small, was in fact half of it five years ago when only six per cent of women had availed a loan.
The study points out that 53 per cent of women have prime credit scores against 47 per cent of men. The delinquency rate for credit availed by women is 5.2 per cent and 6.9 per cent for men.
There were 54 million women borrowers in 2021 while the number was 22.5 million five years ago. Women borrowers seeking loans for their businesses are twice more likely to be rejected as compared to male entrepreneurs. Despite having a good credit score and timely repayers, credit penetration to women is rather low.
A 2021 survey claims that only 25 per cent of women own smartphones in India, as compared to 47 per cent of the male population. With a lack of assets, negligible formal financial history, and minimum generated digital data if any, loan decisioning algorithms may work against women in India, especially if the bias is not corrected, reports News 18. Correcting bias in data-driven loan decisions may help improve credit penetration to women in India.