A new report released by the Indian credit industry shows that women borrowers in India are growing at a compound annual growth rate (CAGR) of 14.2%, making them one of the fastest-growing customer segments for banks and non-banking financial companies (NBFCs) across the country.
The report, compiled from data of major lenders including HDFC Bank, ICICI Bank, Bajaj Finance, and Microfinance institutions, reveals that women now account for 28% of total retail loans in India, up from 19% five years ago.
Key Findings of the Report
- Fastest Growing Segment: Women borrowers are outpacing their male counterparts in loan uptake by nearly 3.5 percentage points annually.
- Microfinance Dominance: Women account for over 95% of all microfinance borrowers in India, with the sector disbursing over ₹3.5 lakh crore in FY2025.
- Urban-Rural Distribution: While urban women lead in personal loans, car loans, and home loans, rural women continue to dominate microfinance and self-help group (SHG) lending.
- Credit Quality: The report surprisingly found that women borrowers have better loan repayment rates, with a Non-Performing Asset (NPA) ratio of 2.1% compared to 4.3% for male borrowers.
- Preferred Loan Types: Home loans (35%), personal loans (28%), and business loans (22%) are the most popular categories among women borrowers.
Why Women Borrowers Are Growing
Several factors are driving this growth:
- Financial Inclusion Schemes: Government initiatives like MUDRA loans, PM Mahila Shakti, and SHG-bank linkage programs have dramatically expanded women’s access to formal credit.
- Digitalization: Mobile banking and fintech apps have lowered barriers to borrowing for women across income segments.
- Rising Workforce Participation: More women entering the formal workforce generates stable income, qualifying them for larger loan amounts.
- Targeted Products: Banks are launching women-specific loan products with lower interest rates and relaxed collateral requirements.
Conclusion
India’s women borrowers growing at 14.2% CAGR is a powerful indicator of financial inclusion progress. As lenders increasingly recognize women as low-risk, high-potential customers, investment in women-centric financial products is set to accelerate through 2026 and beyond.