Niti Aayog’s push for inclusive finance to empower women

Niti Aayog highlights the need for targeted policies to expand women’s access to affordable credit through flexible loan terms and inclusive financial products. While women’s participation in entrepreneurship is rising, barriers such as gender bias, limited financial literacy, and collateral challenges persist. 

Niti Aayog has emphasized the need for targeted policies to expand affordable credit access for women through flexible loan terms and convenient repayment options. These measures aim to boost credit uptake among women and address gender bias in financial markets, promoting gender-inclusive finance.

“While women’s labour force participation and entrepreneurial activity are increasing, systemic barriers such as limited access to finance, gender biases, and inadequate financial literacy persist,” the Aayog stated in a report released on Monday.

Jointly published by TransUnion CIBIL, Niti Aayog’s Women Entrepreneurship Platform (WEP), and MicroSave Consulting (MSC), the report highlights the economic potential of women’s entrepreneurship. “Women’s entrepreneurship holds immense potential, and addressing these challenges with targeted policies, inclusive financial products, and public-private collaboration is essential to unlocking their full economic impact,” it noted.

Since 2019, women’s share in business loan origination has risen by 14%, while their share in gold loans has grown by 6%, with women accounting for 35% of business borrowers by December 2024. “However, challenges such as credit aversion, poor banking experiences, barriers to credit readiness, and issues with collateral and guarantors persist,” the report added. It also pointed out that “with rising credit awareness and improved scores, financial institutions have the opportunity to offer gender-smart financial products tailored to women’s unique needs.”

By 2024, 42% of loans availed by women were for personal finance, a slight increase from 39% in 2019. While credit supply for women in business sectors has improved, the majority of loans accessed by women remain gold-backed. “36% of all loans availed by women in 2024 were gold loans compared to 19% of loans availed in 2019,” the report stated.