CURRENT AFFAIRS
CURRENT AFFAIRS
Description
NITI Aayog has recently released a report titled "From Borrowers to Builders – Women’s Role in India’s Financial Growth Story", which underscores the increasing involvement of women in managing their finances and seeking credit. By December 2024, around 27 million women were actively monitoring their credit scores, marking a 42% increase from the previous year. This surge reflects a growing awareness and engagement with financial health among women in India.
Women’s Growing Financial Engagement
According to the report, women’s participation in financial activities has tripled between 2019 and 2024. This trend is particularly strong in semi-urban and rural areas, where 60% of female borrowers are located. Women are increasingly taking loans for a variety of purposes, including starting businesses, engaging in agriculture, and acquiring property.
Rise In Credit Monitoring Among Women
The report shows a significant rise in the number of women actively monitoring their credit. As of December 2024, women accounted for 19.43% of all self-monitoring credit users, up from 17.89% in 2023. This growing trend is indicative of an increase in financial literacy among women. Notably, non-metro areas experienced a 48% increase in women actively tracking their credit scores, compared to a 30% rise in metro regions.
Regional Distribution Of Financial Participation
The self-monitoring credit base is not evenly distributed across India. Maharashtra, Tamil Nadu, Karnataka, Uttar Pradesh, and Telangana together accounted for nearly half of all women actively tracking their credit scores. Southern India led the way with 10.2 million women engaged in credit monitoring. In contrast, Rajasthan and Madhya Pradesh in the north exhibited the highest growth rates in the number of active women borrowers over the past five years.
Loan Preferences And Borrowing Trends
Women’s preferences for loan types are diverse, with 36% of women opting for loans against property, 26% for agricultural loans, and 25% for business loans. By December 2024, women accounted for 35% of all business borrowers, reflecting a 14% increase in business loan origination since 2019. This indicates a significant shift towards entrepreneurial activity among women.
Challenges To Accessing Credit
Despite the progress, several challenges persist. Many women still face barriers to credit access, including credit aversion, poor banking experiences, and difficulties related to collateral requirements. Financial institutions must address these challenges by offering gender-smart financial products that cater to women’s unique financial needs.
Socio-Economic Impact Of Women Financial Inclusion
The increasing financial participation of women is a key driver of India’s economic growth. Encouraging more women to engage in entrepreneurship could create up to 170 million job opportunities, benefiting not just women but the broader economy as well. Women’s financial inclusion not only empowers them but also contributes to the country’s overall economic development.
Role Of Financial Institutions
Financial institutions are urged to design products that are inclusive and gender-responsive, catering to women’s specific financial needs. Initiatives such as the Financing Women Collaborative aim to create an ecosystem that supports women entrepreneurs through better access to credit and improved financial literacy.
Future Directions For Women Financial Empowerment
To sustain this momentum, focused interventions are essential. Programs aimed at promoting financial literacy among younger women, who currently represent only 27% of retail credit consumers under 30, can help bridge the gap. By doing so, the financial security of women will be enhanced, and more women will be encouraged to pursue entrepreneurial ventures, further driving economic progress in the country.
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