Potential Biases Against Women Impede Lending To Women: ED, RBI

(MENAFN- KNN India) New Delhi, Jul 6 (KNN)
Reserve bank of India (RBI) Executive Director Neeraj Nigam addressed the challenges of financial inclusion and economic growth, particularly emphasising the low participation of women in the workforce.

The ED, RBI also noted potential biases in lending practices, suggesting that women borrowers may face higher interest rates, stricter collateral requirements, or loan rejections due to perceived higher risk.

Speaking at the 'Financing Women Collaborative' conference, Nigam presented data indicating a significant disparity in labour force participation between genders, with women at 32.8 per cent compared to men at over 77 per cent in FY22.

Additionally, he mentioned behavioural factors among women borrowers, including risk aversion and hesitancy in loan negotiations.

Nigam pointed out that women-led businesses account for only 7 per cent of outstanding loans to Micro, Small & Medium Enterprises (MSMEs), despite women leading nearly 20 per cent of these enterprises.

This underrepresentation in credit access was highlighted as a key area for improvement.

While acknowledging progress in financial services accessibility through initiatives like the Pradhan Mantri Jan-Dhan Yojana (PMJDY) scheme, Nigam identified persistent demand-side issues.

These include structural barriers such as limited capital, restrictive societal norms affecting property inheritance, and reduced access to education and training for women.

To address these challenges, Nigam outlined RBI initiatives aimed at enhancing financial literacy, including the establishment of 2,400 centres at the block level in partnership with non-profit organisations.

He also mentioned the mandate for lead banks to operate literacy centres in each district.

The conference, jointly organised by Niti Aayog and Transunion Cibil, served as a platform to discuss these critical issues in women's financial inclusion and economic participation.

(KNN Bureau)


KNN India

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