Indian women are emerging as more reliable borrowers than men across the formal financial system, but their participation in credit, insurance and wealth products remains disproportionately low, showing a widening gap between financial inclusion and meaningful financial engagement. However, they account for only 17 per cent of active personal loans and 13 per cent of outstanding credit card portfolios, according to a 2026 report by Redseer Strategy Consultants.
As of CY24, 66 per cent of women borrowers held prime or above CIBIL scores compared with 60 per cent among men, while delinquency stood at 1.6 per cent against 2.2 per cent for male borrowers. Separate data from TransUnion CIBIL showed women also recorded lower default rates at 5.2 per cent versus 6.9 per cent among men. The participation gap extends beyond credit. Women hold 23 per cent of mutual fund assets under management and account for 27 per cent of new life insurance policies, according to Redseer.
The economic implications extend beyond financial services. Women contribute around 18 per cent to India’s gross domestic product despite representing nearly half the population, according to Niti Aayog. Estimates by the International Monetary Fund (IMF) suggest that narrowing gender gaps in labour force participation could materially raise India’s economic output.
“The gap is not about differences in credit behaviour. Women often demonstrate strong repayment performance. While informality and limited credit histories impact both men and women in India, the difference is in the degree of financial visibility and participation. On average, women have fewer formal financial footprints, less prior exposure to credit and fewer active financial connections. This makes them less visible to underwriting models and less engaged with fintech platforms. Consequently, they participate less even though their credit performance is comparable, said Gaurav Jalan, Founder and Chief Executive Officer, mPokket.
Beyond Account Ownership
India’s financial inclusion narrative has largely been built around account ownership and digital adoption. The Reserve Bank of India’s (RBI) Financial Inclusion Index rose to 67 in March 2025 from 46 in 2018, while Pradhan Mantri Jan Dhan Yojana has opened more than 55 crore accounts, of which over 55 per cent are held by women.
Yet ownership has not translated into active participation. According to Women’s World Banking, nearly 48 per cent of accounts opened by women under Pradhan Mantri Jan Dhan Yojana remained inactive as of 2021. The World Bank’s Global Findex Database 2024 found that while India has largely narrowed the gender gap in formal account ownership, frequency of use remains uneven.
Data from the National Family Health Survey (NFHS-5) shows a similar disconnect. While 53.9 per cent of women reported owning and independently using mobile phones, only 23 per cent used those devices for financial transactions. India today operates one of the world’s largest digital payment ecosystems, but greater digital engagement has not translated into proportional adoption of credit and investment products.
“While smartphone penetration and bank account ownership have surged, higher digital engagement has not automatically translated into credit adoption due to a deep-seated trust and literacy gap. Many women are digitally active but remain credit-averse, often self-excluding because products are not designed for their specific cash-flow patterns, which typically favour smaller, more frequent transactions and flexible repayment schedules,” said Dipal Dutta, Chief Executive Officer, RedoQ.
However, the GSMA's Mobile Gender Gap Report found that as of 2024, only 32 per cent of Indian women had smartphone access, and internet usage among women remained 50 per cent lower than men's, a structural constraint that sits upstream of every fintech solution being proposed. A Redseer survey found that 97 per cent cited lack of information as the primary reason for hesitating to adopt new financial products.
Credit Growth Masks Structural Gaps
Participation in formal credit has expanded sharply in recent years. A March 2025 report by NITI Aayog’s Women Entrepreneurship Platform, TransUnion CIBIL and MicroSave Consulting titled ‘From Borrowers to Builders’ found women borrowers grew at a compound annual growth rate of 22 per cent between 2019 and 2024. By December 2024, around 27 million women were actively monitoring their credit scores, representing a 42 per cent increase from the previous year.
A second edition of the same report, released in April 2026, found women borrowers now hold a credit portfolio of Rs 76 lakh crore, 26 per cent of India's total system credit. Credit to women business borrowers grew at a CAGR of 31 per cent between 2022 and 2025, outpacing overall commercial credit growth of 17 per cent. Yet the composition of that growth remains uneven.
Business loans accounted for only three per cent of all loans taken by women borrowers in 2024, despite a 4.6-fold increase in business loan accounts since 2019. Women borrowed Rs 4.8 lakh crore through personal finance products compared with Rs 1.9 lakh crore disbursed as business credit. The report identified persistent barriers, including credit aversion, weaker banking experiences, lack of collateral and difficulty securing guarantors.
The imbalance becomes more visible when women move from being users of financial products to builders of businesses. Women account for nearly 20 per cent of India’s micro, small and medium enterprises (MSMEs), yet financing access remains disproportionately low.
"Women entrepreneurs in India are not excluded from the formal financial ecosystem due to lack of intent — they actively seek it and today represent nearly 20 per cent of Indian MSMEs. The gap is largely structural. Traditional and digital underwriting models often fail to capture the true financial profiles of women-led businesses due to limited collateral recognition, proxy-based assessments, and embedded biases," said Gurjodhpal Singh, CEO, Tide India.
Singh pointed to the Bharat Women Aspirational Index, which found that over 55 per cent of women entrepreneurs reported experiencing bias during credit processes. "A significant part of this stems from the nature of their business operations, where a portion of transactions may remain undocumented, limiting the creation of consistent digital financial footprints. As a result, their true creditworthiness often remains underrepresented within formal evaluation systems."
Wealth Participation Lags
In mutual funds, women's share has effectively flatlined. Data published by the Association of Mutual Funds in India (AMFI) and Crisil Intelligence in the ‘Sahi Journey Factbook 2025’ found women’s share of individual investor assets remained broadly unchanged at around 33 per cent since 2019. At the same time, average investment account sizes among women increased by 23 per cent compared with five per cent among men.
The Redseer figure, 23 per cent of total mutual fund AUM, differs because it measures total AUM including institutional holdings rather than individual accounts. Both readings point to the same arrest. With estimates that the underserved segment represents Rs 2,00,000 billion in potential AUM, Rs 17,000 billion in insurance and Rs 67,000 billion in lending.
The Securities and Exchange Board of India (Sebi) acknowledged this challenge in 2025 by proposing incentives for distributors bringing new women investors into the market and encouraging lower-ticket systematic investment plans. Redseer also found nearly 80 per cent of testimonials on major financial platforms featured men, while 14 of India’s top 15 finance creators were male. Men accounted for 71 per cent of insurance agents in FY24.
Nearly 46 per cent of surveyed women preferred lower-risk investments with moderate growth, while 16 per cent preferred goal-linked products. Only eight per cent preferred high-risk investment approaches, according to the Redseer report, defining the core failure as product misalignment, not financial disinterest.
Yet the dominant distribution model pushes retirement-focused SIPs at younger salaried women seeking financial autonomy, and long-term lock-in products at self-employed women who need short-term flexible cover. Around 70 per cent of surveyed women identified family members as their primary source of financial guidance. Including secondary preferences pushed that figure to 84 per cent. Only 26 per cent identified themselves as the sole financial decision-maker within their household, according to the Redseer report.
“To bridge this, the industry must pivot towards gender-intelligent design. Platforms need to leverage alternative data such as Unified Payments Interface transaction histories, utility payments and community-based social capital to build a more accurate profile of a woman’s intent to repay…“Ultimately, unlocking this market requires recognising that women are not a monolithic group. Their financial behaviour is often more goal-oriented and household-centric,” said Dutta.
The World Bank's 2024 Global Findex found that countries with greater female financial inclusion recorded higher GDP growth, lower income inequality and stronger economic resilience.
"Bridging this gap is not just a gender inclusion imperative; it is a significant economic opportunity. Enabling women entrepreneurs with the right financial tools can unlock greater business scalability, improve credit penetration, and drive more balanced growth within India's fintech ecosystem," Singh added.
Jalan is measured about what fintech can and cannot do. "Conversion improves when products feel relevant, easy to use and trustworthy, not just accessible," he said. “This involves creating simple, low-risk entry points that meet genuine needs, and then gradually building trust.” |
