Women Getting More Credit Conscious, also Default Less than Men: CRIF Insights
Women are turning out to be more cautious than men when it comes to borrowing, yet their tribe is rising, reports from credit bureau indicates. They are a safer bet for lenders to target as delinquencies by women borrowers too are relatively low.
Women borrowers in the age group 36-50 have risen by 33 per cent since December 2017. While older women have been borrowing at an even more rapid pace as women borrowers in the age group over 50 years have risen 41 per cent, according to a study by credit bureau Crif Highmark.
As the number of women borrowers has grown, awareness and credit consciousness amongst women borrowers has also improved. Self-monitoring – regularly assessing one’s credit score and arriving at a credit decision by women borrowers has risen by 62% between 2018 and 2019, a report by credit bureau Transunion Cibil shows. This is twice the growth rate of self-monitoring male consumers 30%, the report said).
According to Transunion Cibil 56% of these self-monitoring women consumers are from the states of Maharashtra, Tamil Nadu, Karnataka, Telangana, and Delhi. Though Andhra Pradesh contributes only to 5% of this segment, 44% of them go on to avail a loan or credit card within three months of checking their credit score. Interestingly, 64% of self-monitoring women consumers are millennials in their twenties.
Most preferred loans are unsecured loans, consumer loans and retail loans, according to Transunion Cibil. “Women consumers may be viewed more positively because of better credit profiles than their male counterparts, and that will translate into more access to credit and faster loan approvals too ” says Sujata Ahlawat, VP and Head of Direct-to-Consumer Interactive, TransUnion Cibil.
For Home loans as well as Auto loans, the delinquency of women borrowers at 0.63% and 0.96% is better off by 15 basis points and 10 basis points, respectively over the delinquency of male borrowers, the Crif Highmark report notes. But for Personal loans, the delinquency is almost at par for both men and women with a marginal difference of just one basis point, where women are deemed to be at a higher default risk at 0.70%, it said.