Microfinancing Can be Key for Women Empowerment, Entrepreneurship in India

August 24, 2023

“If the economy is the body, then credit is the blood that keeps the body functional.” 

Shahid Charania, Equifax’s Managing Director for Emerging Markets, describes the basic importance of credit. He leads a team that is working to bring more access to credit to India’s 1.4 billion people in the form of microfinance. 

Microfinance is financial services, such as small loans, provided to low-income individuals or groups who are typically excluded from traditional banking.

Equifax has helped over 62 million people in India secure microfinance loans. Many of them are women.

Studies show that microfinance loans, such as Rural Community Development Programs (RCDP), are an effective tool that can contribute to the development of women’s empowerment and entrepreneurship.  

As illustrated in the figure below¹, microfinance loans can lead to women having more control over their savings, household expenses, even marriage decisions and other social empowerment elements.


Microfinancing not only works for the betterment of women but also affects the wellbeing of those women’s entire families by supporting them in enhancing their family earnings.

Earlier in 2023, Equifax launched the Household Combined Credit Report for the Microfinance Segment. The report eases the processes of Microfinance loan underwriting by enabling easier assessment of the credit capacity of an applicant based on total income. 

Previously, lenders could only view the reported income and aggregated equated monthly installments (EMI) obligations of individuals. To make assessments at the household level, lenders still needed to pull multiple reports for each household member and aggregate them to understand the household position. With this product, the manual process faced by lenders on a day-to-day basis is addressed, providing a holistic solution to aid Microfinance credit decisioning.

"The solution is designed to help Microfinance lenders responsibly expand consumer access to credit by providing a more comprehensive financial view of a total household for a fuller picture of credit history and risk," said Shahid Charania, Managing Director Emerging Markets. 

He further added - "This unique product is designed to significantly save bandwidth for our clients and provide a seamless customer experience." 

With a single inquiry, lenders can extract a comprehensive report of the household, which includes the applicant and up to five household members. Applicant details will be pulled via a hard inquiry, while household member information will be pulled through a soft enquiry. The result is a detailed report summarizing household income, total household EMI obligations, and the credit exposure of each member of the household - including income, total credit exposure and default indicators.

Watch how Equifax is working to open the doors for the country’s population to live their financial best.


¹ Khursheed, A. Exploring the role of microfinance in women’s empowerment and entrepreneurial development: a qualitative study. Futur Bus J 8, 57 (2022).