Abstract

Access to credit is not merely a financial transaction - it is a foundation for economic resilience, social mobility, and a tool for poverty alleviation. For millions of rural Indian households, credit enables the purchase of agricultural inputs, sustains consumption in lean seasons, and provides a cushion against health or income shocks. Yet, for large segments of the population—especially women and those belonging to socially marginalized castes—access to timely and affordable credit remains limited. Their exclusion from formal financial systems is not just an economic gap but a reflection of deeper structural inequalities.
Recognizing this, India embarked on an ambitious financial inclusion (FI) agenda in 2005, which was defined as “the process of ensuring access to financial services and timely and adequate credit for vulnerable groups such as weaker sections and low-income groups at an affordable cost” (Committee on Financial Inclusion, RBI, 2008). The policy aligns with global development priorities under the Sustainable Development Goals (SDGs)—particularly SDG 1 (No Poverty) and SDG 5 (Gender Equality).
The gender gap in account ownership has narrowed from 18 percentage points in 2011 to near parity by 2021 (Global Findex Database, World Bank, various rounds). The share of formal debt in total household debt also increased from 57 per cent in 2002 to 66 per cent in 2019 (Pradhan, 2013; All India Debt and Investment Surveys, various rounds). However, having a bank account does not guarantee equitable access to credit. While the first step toward inclusion has been achieved, the quality and depth of access remain uneven, particularly when gender and caste interact to shape outcomes.

Despite progress in expanding financial access, rural credit markets in India remain stratified along social lines. Women are less likely to receive formal loans, tend to borrow smaller amounts, and often face stricter repayment terms compared to men. Among women, those belonging to Scheduled Caste (SC) households experience the most severe exclusion. Existing research has studied gender-based and caste-based differences separately, but very few studies examine how these two axes of inequality reinforce each other in determining access to credit. Understanding this intersection is crucial for policy design: an inclusive financial system must not only count how many are included but also who remains excluded, under what conditions, and at what cost.

This study employs a mixed-method approach combining secondary and primary data to capture both macro-level patterns and micro-level realities. Secondary data were drawn from two key national databases: The World Bank Global Findex (2011, 2014, 2017, 2021), which provides gender-disaggregated information on account ownership and credit usage; and The All-India Debt and Investment Surveys (AIDIS) (2019), which offer caste-wise data on sources and magnitude of household credit. Primary data were collected through a field survey conducted in two villages in Uttar Pradesh (UP), covering 220 households. The survey gathered detailed information on loan size, source, interest rate, repayment conditions, and purpose of borrowing, along with gender and caste identifiers.
While Findex and AIDIS independently capture gender and caste dimensions, respectively, the primary survey bridges this critical gap by analysing both simultaneously - allowing a direct assessment of how gender and caste intersect to shape credit access.

The findings reveal a dual narrative of progress and exclusion.
Expansion in access but inequality in utilization: While more women now own deposit accounts and interact with formal financial institutions, they continue to lag behind men in borrowing from formal sources. Women’s share of loans, relative to their population share, remains disproportionately low. The average loan size received by women is smaller, and they are more likely to rely on short-term, high-interest credit compared to men.
Caste compounds gender disadvantage: Among women, those belonging to Scheduled Caste (SC) households face a deeper form of exclusion. They not only access fewer formal loans but also bear higher borrowing costs. SC women are more dependent on microcredit and group-based loans that often carry strict repayment conditions, leaving little room for investment in productive activities. These loans tend to be used for consumption smoothing rather than income generation, trapping them in cycles of low income and recurring debt.
Policy inclusion ≠ equitable empowerment: India’s financial inclusion drive has successfully increased the number of account holders but has not ensured meaningful inclusion, characterized by equitable access to quality credit and improved financial wellbeing. The structural factors of caste hierarchy, gender norms, and unequal asset ownership continue to limit women’s financial autonomy.
Financial inclusion policy must go beyond counting accounts or loans to assess the quality, cost, and purpose of credit, especially for women from marginalized castes. Targeted interventions, such as caste-sensitive lending, tailored credit for women’s enterprises, and flexible repayment can deepen true inclusion. Empowerment requires policies that would reduce poverty increasing household incomes so that they can confront structural inequities, ensuring credit access translates into meaningful and equitable financial participation.