The Problem: Caste discrimination continues to plague the Indian banking sector, limiting access to credit for millions of lower-caste citizens. Data Point: A study found that Scheduled Tribes (STs) face a 5-7% lower loan approval rate compared to higher castes, even after controlling for socioeconomic factors. How it Works: Discrimination in Action: Lower-caste individuals often encounter: Higher rejection rates for loan applications. Smaller loan amounts compared to higher-caste applicants. Less favorable terms, such as higher interest rates and stricter collateral requirements. The "Depositors, Not Borrowers" Mindset: Banks often view lower-caste individuals primarily as depositors, not as creditworthy borrowers. The Impact: Limited Economic Mobility: Restricted access to credit hampers entrepreneurship, reduces income growth, and perpetuates poverty cycles within marginalized communities. Reliance on Informal Lenders: The lack of access to formal ba...
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