Women’s Access to Banking in India: Policy Context, Trends, and Predictors

Abstract

There has been an increase in women’s share in bank credit in India in recent years, which includes credit given directly to women and indirectly via microfinance institutions that lend to women. However, bank credit to women has not grown as fast as credit given to men, resulting in a widening gender gap. The gender gap in credit is even wider when the credit received by women and men is seen as a ratio of the bank deposits they contribute. Credit received by women is only 27 per cent of the deposits they contribute, while the credit received by men is 52 per cent of their deposits. The policy of financial inclusion has significantly enhanced the probability of women holding bank deposits, and has pushed India above the world average in terms of the percentage of women with bank deposits. This increase in deposits is not matched by a corresponding increase in women’s access to bank credit. To address the gender gap, the policy of financial inclusion must be gender-sensitive and correct its disproportionate emphasis on deposits.