Summary of this article
Women’s account ownership has risen, but active usage is limited
Women show lower loan defaults, yet receive less formal credit
Insurance and investment participation among women remains low
Over the last few years, financial access among women has expanded rapidly, with a sharp increase in the number of bank account owners and entry into formal finance. However, the growth has not been translated into the equal utilisation of financial products like loans, insurance and investments.
According to the latest Redseer report, titled Designing for Her: Unlocking Women's Financial Adoption in India, women have still remained underserved even after showing better repayment behaviour and less credit risk than men.
Access Numbers Mask Usage Gaps
According to the report, over 75 per cent of adult women own bank accounts, a number that has risen steadily over the past decade. This makes a significant advancement in formal financial access. But the usage data shows a different story. A substantial proportion of accounts owned by women are not properly utilised or are only used for simple transactions like cash payment and government benefit transfers.
The difference is more pronounced when it comes to credit. Women account for less than 20 per cent of the total credit outstanding, even though they constitute nearly half the adult population. The report has also indicated that women are even less involved in secured lending products like home loans or vehicle loans.
Women Show Better Repayment Behaviour
One of the key findings of the report is that women borrowers outperform men on repayment metrics. In all lending categories, the delinquency rates among women are 20-30 per cent lower than those of male borrowers. The default rates in women are also lower, especially in small-ticket and retail loans.
Irrespective of these signs, the leading volumes for women remain limited. The report notes that credit assessments and product targeting have not followed up on the indications that women are a less risky borrower group.
Low Participation in Insurance and Investment
Under-representation of women extends beyond credit. The report has stated that less than 30 per cent of women have a life insurance policy in their own name. Health insurance coverage for women is also often indirect, with them being included as dependents under family policies rather than as primary policyholders.
Investment participation is even lower. Less than 15 per cent of women invest in market-linked products like mutual funds or equities. The long-term savings products are also highly concentrated among the salaried women, leaving those with irregular incomes to rely on informal savings or physical assets.
A Gap Driven by Structural Barriers
The disparity between access and adoption is not due to the lack of financial capability. Rather, it indicates institutional obstacles in the financial system. The product designs are often shaped around stable, full-time incomes, which do not apply to a huge segment of women who face income discontinuities or fluctuations.
Communication also plays a key role. Men are often targeted as the main decision-makers in the financial products market, which restricts direct interaction with female customers. The report notes that fewer than 25 per cent of financial advisory interactions involve women as the primary customer.
Untapped Potential for Financial Providers
The report recognises women as a strong growth and quality cohort for financial institutions. Women's workforce participation has increased consistently, and their average credit scores are better than those of men with a similar income. However, without targeted product design and distribution, this potential remains largely untapped.
The report concludes that account ownership is not a complete measure of success. Access has increased, but adoption remains uneven. Closing this gap will require financial institutions to focus on usage, ownership and product relevance rather than headline inclusion numbers.
