How India's Female Entrepreneurs Are Redefining Economic Growth?

For decades, financial independence for women in India has been a goal rather than a reality. However, a quiet but powerful revolution is reshaping this narrative. Women across the country are not just borrowing money to start businesses—they are actively monitoring their credit health, understanding their financial worth, and making strategic moves to secure their future.

A recent report, From Borrowers to Builders: Women’s Role in India’s Financial Growth Story, launched by NITI Aayog in collaboration with TransUnion CIBIL and MicroSave Consulting, highlights an unprecedented rise in financial awareness among women. The numbers tell an inspiring tale—27 million women were monitoring their credit scores as of December 2024, a remarkable 42% increase from the previous year. This surge signifies more than just statistics; it represents a shift in mindset, a movement toward financial empowerment that is shaping India's entrepreneurial landscape.

TICE brings you key highlights of tis report. 

The Growing Role of Women in India’s Credit Economy

Women’s increasing participation in credit monitoring reflects their growing confidence in financial systems. In December 2024, women accounted for 19.43% of the total self-monitoring credit base, up from 17.89% in 2023. The report indicates that women are not only seeking loans but are also keen on maintaining strong financial discipline, ensuring their creditworthiness, and making informed financial decisions.

What’s even more striking is that this trend is being led by women from non-metro regions. While metro cities have witnessed a 30% rise in credit monitoring by women, non-metro areas have outpaced them with a 48% growth. This suggests that financial inclusion initiatives and digital banking penetration are finally reaching grassroots levels, allowing women in smaller towns and rural areas to participate actively in the formal financial system.

From Borrowers to Builders: Women Entrepreneurs Driving India’s Economy

The impact of this financial awareness extends beyond individual credit scores. Women entrepreneurs are emerging as a formidable force in India’s economic growth story. Over the past five years, states like Rajasthan, Uttar Pradesh, and Madhya Pradesh have recorded the highest growth in active women borrowers, proving that financial literacy and access to credit can empower women to drive businesses and create employment opportunities.

According to the report, women now account for 35% of business borrowers, a figure that has steadily grown since 2019. Sectors such as retail, e-commerce, and services have seen a significant rise in women-led enterprises, fueling job creation and innovation. Experts believe that if this momentum continues, women entrepreneurs could generate employment for nearly 150 to 170 million people in India, a game-changer for gender-inclusive economic growth.

Challenges on the Road to Financial Empowerment

While these numbers paint a promising picture, significant challenges remain. Despite their growing financial participation, many women still struggle with structural barriers that limit their access to credit. Some of the key obstacles include:

• Credit aversion and low banking confidence: Many women, especially in rural areas, are hesitant to approach banks or financial institutions due to a lack of awareness or past negative experiences.

• Collateral and guarantor requirements: Traditional banking structures often require collateral or male co-signers, making it difficult for women to secure loans independently.

• Limited availability of women-centric financial products: The lack of tailored credit products designed specifically for women entrepreneurs continues to be a roadblock to their financial progress.

To address these gaps, the Women Entrepreneurship Platform (WEP) has launched initiatives such as the Financing Women Collaborative (FWC), bringing financial institutions and policymakers together to create a more inclusive financial ecosystem.

What's Next? Gender-Smart Financial Products and Policies

With financial awareness on the rise, financial institutions now have an opportunity—and a responsibility—to design products that cater to women’s unique needs. The focus should be on gender-smart financial solutions, such as collateral-free business loans, lower interest rates for women entrepreneurs, and mentorship programs that provide financial literacy and guidance.

Moreover, government policies must continue to evolve to ensure greater accessibility to credit for women. Incentives for financial institutions that prioritize lending to women, digital literacy campaigns, and simplified loan application processes can go a long way in sustaining this momentum.

The journey from borrowers to builders is not just about financial transactions—it is about empowerment, independence, and breaking long-standing societal norms. The increasing financial participation of women in India marks the beginning of a transformative era where women are not just part of the economic framework but are actively shaping it.

As India moves towards becoming a $5 trillion economy, the role of women in finance will be instrumental. With the right support, inclusive policies, and access to financial resources, women can unlock unprecedented economic potential, making India’s growth story truly inclusive and sustainable.