A recent report from TransUnion Cibil on consumer credit reveals some encouraging new trends in the credit market. The number of borrowers is growing rapidly, with more and more women coming into the market for loans. The new borrowers hail mostly from non-Tier I cities. Loans for buying consumer durables, home loans, personal retail loans and even auto loans are being demanded by women. The survey reports that women borrowers are also more credit-conscious than men. Women check their credit scores frequently and self-monitor more effectively. Micro-finance loans, which revolve around women’s self-help groups, have a strong repayment culture. The survey finds that people with small-ticket loans have deeper relationships with the lender and, typically, go for repeated loans from the same source. There are 4.7 crore women who are active, new borrowers, out of whom 61 per cent have a credit score of greater than 720. What does this trend imply for lenders, such as banks and non-bank financial companies, including micro-finance institutions? The first is the need to tap into this source of credit demand because it would turn out to be less risky and more productive as time goes on and the relationship with the lender improves. This will require lenders to provide customer-friendly facilities to transact in local languages. It would also require more and more transactions to be done remotely so that the borrowers do not have to go to the lender’s office.

Both these mandate a focused development of technologies that can help women better understand the terms and conditions of a loan and transact from home without upsetting their work and domestic responsibilities. Small-ticket loans to women are still thought of as being too risky by most bankers and regulators. Yet, this is one area where there appears to be a large credit gap and potentially productive outcomes from loans. Women are serious when it comes to commitments made and they try their level best to meet deadlines. Bankers are still an urban-oriented, male-dominated lot. Women are not perceived to be worldly-wise or having adequate business acumen. However, a detailed study based on business analytics is likely to reveal that women are safer as a financial asset. They can work hard, multi-task better than men, and possess better imagination in areas of potential business, which affects their daily work.