RBI Executive Director Nigam said there is also a need to increase the provision of credit to women, pointing out that micro, small and medium enterprises led by women are the overall outstanding Only 7 percent of loans.

RBI, Reserve Bank of India
The RBI ED also identified some “attitudinal issues” among women borrowers, including being more risk-averse, less confident in negotiating loan terms and seeking new loans due to fear of rejection. The chances of applying are low. (Photo: Reuters)

Press Trust of India Mumbai

Reserve Bank Executive Director Neeraj Nigam said on Friday that low labor force participation among women is also a hindrance to financial inclusion efforts and broader economic growth.

He said there was also a need to increase the provision of credit to women, pointing out that only 7 percent of the total outstanding loans to micro, small and medium enterprises were given to women-led businesses. goes

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“One of the major obstacles to financial inclusion and indeed economic growth and development is the high participation of women in economic activities,” he said, noting that official data indicated that female labor force participation in FY22 was 32.8 percent, which was more than 77 percent. in men.

Women account for only 7 percent of outstanding credit to micro, small and medium enterprises (MSMEs), he said, adding that this is far less than the nearly one-fifth of women-led MSMEs.

Addressing the ‘Financing Women Collaborative’ conference organized by NITI Aayog and TransUnion SABEL here, Nigam expressed satisfaction at the reach on the financial services front, saying that the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme and social security The transition has helped.

Along with supply challenges, he said there are demand-side issues that need to be addressed.

Structural issues such as low levels of capital, labor participation, social norms such as preventing women from inheriting property that limit their ability to provide collateral for lending and low access to education and training.

Nigam also said that there are some “stereotypes” of women borrowers by financiers, such as that they are considered higher risk which leads to higher interest rates, more insistence on rejecting loan applications outright. happens.

The RBI ED also identified some “attitudinal issues” among women borrowers, including being more risk-averse, less confident in negotiating loan terms and seeking new loans due to fear of rejection. The chances of applying are low.

He said the priority sector lending (PSL) mandate has emerged as a viable business model for banks and microlenders, and the “challenges” are on the demand side.

He said that after mitigating the challenges, RBI has initiated initiatives on financial inclusion such as opening 2,400 centers for financial literacy at the block level through partnership with non-profit organizations and for lead banks every It has been made mandatory to have a literacy center in the district.



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