THE INDIAN CREDIT MARKET IS BECOMING WOMEN VIBRANT
In recent years, India has noticed an increase in women consumers becoming a part of the credit landscape. There is a high rise in awareness and credit consciousness among women borrowers.
As per the recent update by CIBIL, self-monitoring women are the ones who make the real difference. The Indian credit market has seen a rapid penetration and participation of women customers. Comparing the share of women borrowers to overall borrowers is about 26% as of September 2016, which was 21% in September 2013.
See What Statistics Says…
According to TransUnion CIBIL Insights, with an increasing number of women borrowers in the Indian credit market, about 30 million women borrowers are getting access to several credit products.
Self-awareness and credit consciousness among the women borrowers have also seen a sharp increase, with self-monitoring women customers increasing by 62 percent between 2018 and 2019. It is double the 30% growth rate of self-monitoring makes customers as per the insights.
Talking about these findings, the COO of TransUnion CIBIL, Harshala Chandorkar told that
“The significant increase in the number of women who are seeking credit products is a promising indicator of the evolution of India’s credit market which has enabled increased economic opportunities for women borrowers. Financial institutions must unlock the significant potential that lies in customizing product constructs for women borrowers to further drive business growth and enable greater customer experience for women consumers.”
All financial institutions should unlock the substantial prospective that lies in personalizing all product constructs for the women borrowers to dive into business growth and allow a better consumer experience for the women customers.
TIER 1 CITIES HAVE MORE WOMEN CONSUMERS; WHY?
Most of the women consumers are from tier 1 cities. As per the recent insights of TransUnion CIBIL insights, about 56 percent of women self-monitoring their credit score are from the state of Maharashtra, Karnataka, Delhi, Tamil Nadu, and Telangana.
While Andhra Pradesh contributes only 5% to this sector, about 44 % go to avail a loan or a credit card within three months of going through their CIBIL Score and report.
It depends on several factors like an increase in women’s education, enhanced consumption of customer durables in tier-1 and tier -2 markets, and an enhancement in several working women.
As per TransUnion CIBIL, there will be further growth in demand for credit in the future among women. The research also states that an increasing number of business loans is seen from states having a maximum number of female MSME owners. This shows that they are credit conscious and are well-aware of the role of their CIBIL report for getting access to credit.
WHAT ARE THE VARIOUS ATTRIBUTES HELPING WOMEN’S POSITIVE CREDIT BEHAVIOR?
Different attributes stimulate the Indian woman’s growing use of credit, the choice of loan, and the credit-awareness. Some of them are:
- Socio-economic status and changes in it
- Attractive loans and credit card offerings by the banks and financial institutions that are specifically aimed at the woman consumer
- Various supported initiatives by the Indian government like Nidhi-Prayaas and Mudra Yojana Scheme that aim to increase women entrepreneurship
HOW ARE WOMEN LEVERAGING CREDIT?
The CIBIL score and report change every three months, and women keeping track of these apply for at least one loan account or credit card. The data suggests that more than 50% of women utilize credit in this way. Out of this 50%, more than 35% could open a loan account or credit card. Not only these, within six months of checking their credit report, women have demonstrated credit consciousness, and more than 40% of them have also improved their credit score.
The average Score of a good CIBIL is 734, and the data suggests that women self-monitoring their credit score have a High Score than the average CIBIL that is 726. Fascinatingly self-monitoring, millennial women customers have a high average score of 735, specifying that 64 percent of self-monitoring women customers are millennials.
The Indian Credit and loan sector lenders prefer to take an onboard credit-conscious customer who can obey the loan agreement and can repay the whole amount entirely on time. The CIBIL Score and report of any customer reflect their credit consciousness. It has been said by Sujatha Ahlawat, who is the VP and Head of Direct to consumer interactive, TransUnion CiBIL.
HOW CAN WOMEN HAVE ACCESS TO MORE CREDIT?
Women can boost their eligibility to meet their financial goals by following these key steps:
- Ensure to create and maintain a positive credit profile
- Access credit cards cautiously and apply for loans or credit cards that are designed just for women
- Take a durable consumer loan to build a credit footprint and a favorable credit profile
- Pay your credit bills and EMI on time, every time
- Check and monitor your CIBIL Score regularly
- Be aware of your credit utilization ratio
- Maintain a balance of the secured and unsecured loan
Women are revolutionizing the credit landscape, and maintaining a healthy credit score can go a long way and may turn your dreams into reality. Also, this enhancement in credit demand and acceptance by women provides excellent opportunities to the whole credit industry to personalize products and services that can better meet the financial needs of women borrowers.