A new report, titled From Borrowers to Builders, presents numbers that, at first glance, should be cause for celebration. The study by TransUnion Cibil, Niti Aayog and MicroSave says Indian women now hold a formal credit portfolio worth ₹76 lakh crore—a 4.8-fold increase since 2017, outpacing the 2.9-fold growth recorded for borrowers overall. Credit penetration among women has risen from 19 percent in 2017 to 36 percent to 2025. Women with active business loans have grown at a 31 percent compound annual rate over the past three years, nearly double the pace of overall commercial credit.
However, once you move past the numbers, a more complicated picture emerges—one that raises a question the report points toward but does not quite answer: credit for what, exactly? And on whose terms?
Consider the composition of first loans. As women enter the formal credit sector, their borrowings are not for business investment or education. Comprising gold loans, consumer durables and personal loans, such first-time formal credit finances consumption. While not undesirable in themselves, these are the products financial systems find easiest to sell to women—low-ticket, collateral-backed and tied to household expenditure rather than enterprise ambition.
The report notes housing finance is one secured category where women show rising participation. However, much of this is as co-applicants, riding on a husband’s or father’s application to access stamp duty concessions. Is that financial inclusion or financial adjacency?
The report also highlights the microfinance segment’s attempts at inclusion. For two decades, joint-liability group lending to women from low-income households has been held up as the gold standard of inclusive finance. It has genuinely lifted millions. However, faced with over-indebtedness and rising non-performing assets, lenders have turned to existing borrowers rather than expanding the base. The share of first-time women borrowers in microfinance originations has slipped from 28 percent in 2022 to 24 percent in 2025. Expanding financial inclusion requires widening the system, not merely deepening it.
The report’s most valuable—yet most unsettling—section is its field research among rural women nano-entrepreneurs in Kerala and Madhya Pradesh running tiny businesses, owning smartphones and with 60-70 percent accepting digital payments. By standard metrics, the recorded 161 women entrepreneurs are digitally included. However, the researchers find that digital access is not the same as digital agency. Transactions are often assisted by family members. Decisions over credit, pricing and procurement are frequently not the woman’s own.
In Kerala, 38 percent of women entrepreneurs reported ‘time poverty’—the double burden of running a business while managing a household—as the principal barrier to sustained digital engagement.
This points to a structural problem no amount of UPI adoption can fix on its own. India’s formal economy has historically been built around a model of the economically visible citizen—someone with a salary slip, a tax record or a provident fund account. Women running nano-enterprises out of their homes, trading in cash and embedded in informal networks have never fit that model. Digital finance has helped, but the report is candid that women’s digital footprints are often thin, inconsistent and interrupted.
Three things actually need to change. First, lenders and policymakers must stop treating access as the finish line. Nearly two-thirds of credit-eligible Indian women still have no formal loan. Of those who do, nearly half have held only a single product in their lifetimes. The report recommends tracking graduation rates, multi-product holding and enterprise growth rather than raw disbursement volumes. While these initiatives may make the numbers suddenly look unimpressive and politically undesirable, these are what need to be measured.
Second, the products themselves must change. Only 4.3 percent of women-owned businesses have access to the more flexible cash credit or overdraft facilities, compared to roughly 40 percent of businesses overall. This is not because women entrepreneurs are less creditworthy, defaulting at only 0.7 times the rate of the average borrower. It is because underwriting models, collateral requirements and documentation requirements are designed for borrowers who do not resemble the average Indian woman entrepreneur. What is needed is not special women’s schemes with lower limits, but gender-intelligent product design: invoice-based credit for women suppliers or overdrafts underwritten against UPI transaction history.
Third, social architecture matters as much as financial architecture. Women adopt digital tools when peers, self-help groups and community institutions endorse them. Any serious strategy for deepening women’s financial participation must work through these networks, not around them. A voice-enabled, vernacular-language credit application launched without a trusted intermediary will sit unused, but if the same product is introduced through a self-help group meeting, it will be adopted quickly.
Indian women have truly earned their place in the credit economy, navigating systems that were not designed for them and building enterprises after attending to their households. The data in the report is genuinely heartening but should not lull us into inaction. The credit revolution will be complete not when more women borrow, but when they borrow for the things they choose, in the amounts they need, with the autonomy to decide what happens next.
Tulsi Jayakumar | Professor, economics & policy, and Executive Director, Centre for Family Business & Entrepreneurship, Bhavan’s SPJIMR
(Views are personal)