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Women at the Helm: emerging Leaders in Retail Credit

India’s credit market is changing. While it may seem male-dominated, the data reveals that women now hold 27.6% of the total retail credit portfolio by value, a steady increase over the past five years. Notably, women borrowers are growing at a 14.2% annual rate, more than double that of men. In the last year, the number of active loans for women increased by more than twice that of men, indicating better access and engagement with formal credit.

Breaking Barriers: The Rise of Women Borrowers in India

Two main factors are driving this growth. First, digitalisation has made loan applications easier, allowing women in tier-2 and tier-3 cities to connect with lenders without needing to visit a branch. Second, the use of data analytics and AI has broadened the criteria for creditworthiness beyond traditional salary slips.

First-time Borrowers Turn the Tide

Women now make up about 41% of new credit customers, a significant shift for a group that was largely excluded from formal financing until recently. This trend includes a variety of loan products that align with the assets women typically possess.

Gold, Home, and Education: The Product Mix

Gold loans dominate the women-focused portfolio, making up 43.5% of the total value. Gold is a culturally significant asset that provides familiar collateral, reducing risk for lenders and allowing women to access funds without losing ownership. Home and education loans follow, reflecting aspirations for stability and growth.

Home and education loans follow, reflecting aspirations for stability and growth.

Unlocking Potential: How Credit Access is Transforming Women’s Lives

The impact of this credit expansion is visible in the job market and household economics. Women with home loans are more likely to start home-based businesses, using their ownership to secure supplier credit. Those with education loans are enrolling in professional courses, leading to higher-paying jobs in technology, finance, and healthcare.

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• Entrepreneurial Momentum: A 2025 survey found that women-led micro-enterprises with gold-backed loans reported a 30% increase in turnover within a year.
• career advancement: Women financing postgraduate degrees through loans were 22% more likely to receive promotions within two years, according to the National Skill Development Corporation.
• Household Welfare: Households with women as primary borrowers show a rise in per-capita consumption, highlighting the positive effects of women-directed credit.

AI and the New Credit Frontier

Behind the growth is a technological shift in risk assessment. Lenders are increasingly using AI and machine learning to evaluate credit applications, incorporating alternative data like utility payments and social media activity to create better risk profiles.

Emerging Skills and Roles

As AI becomes part of underwriting, new professionals are emerging:

1. Data Curators: Specialists who ensure that non-traditional data sources are reliable for AI systems.
2. Model Auditors: Analysts who check algorithmic decisions for bias and compliance.
3. Customer-Experience Designers: Designers who create user-friendly digital interfaces for loan applications.

A recent pilot by Indian fintechs tested an AI-based credit scoring platform that reduced loan approval time for women by 65%, contributing to the increase in active loans.

By investing in education, housing, and entrepreneurship, women unlock underutilized human capital, boosting consumption and diversifying the economy.

The Long-Term View: Strategic Implications for the Economy

Women’s growing role in credit is not just a statistic; it drives structural change. By investing in education, housing, and entrepreneurship, women unlock underutilized human capital, boosting consumption and diversifying the economy.

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However, there are risks. The Indian Express reported that retail loans had the highest write-offs in FY 2025, totaling ₹45,404 crore. While overall write-offs decreased, the concentration of risk in retail loans highlights the need for careful underwriting as more women enter the market.

Competitive Edge: Lenders Adapting to Women Borrowers

Financial institutions that understand women’s unique credit needs can gain a competitive advantage. Tailored products, like lower-interest gold loans with flexible repayment options, are attracting loyal customers. Lenders using AI responsibly can better assess risk, reduce defaults, and expand their reach.

• Product Innovation: Banks with “women-first” home loan schemes saw a 12% rise in applications from female first-time buyers.
• Risk Management: AI-enhanced scoring models reduced non-performing asset ratios for women-centric loans by 0.4 percentage points.
• Brand Loyalty: Women rated institutions with transparent digital processes 18% higher than those using traditional paperwork.

Sustainable Lending and Circular Practices

Credit is increasingly linked to sustainability. Green loans for energy-efficient upgrades are popular among women who view environmental care as a family duty. Social loans for community projects are also appealing to women entrepreneurs who want to align profit with purpose.

Risk Management: AI-enhanced scoring models reduced non-performing asset ratios for women-centric loans by 0.4 percentage points.

These trends support the circular economy. By financing upgrades to existing assets, lenders promote resource efficiency while growing their loan books. This connection between gender-focused credit and sustainable finance creates a positive cycle: women access capital, invest in resilient assets, and generate repayment streams that boost lender confidence.

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