Many banks and microfinance companies claim that they treat everyone equally. But research shows something very different. Even when people from different castes have the same income, same land, and same education , a big part of the difference in who gets loans cannot be explained . This unexplained gap is because of statistical discrimination — lenders assume someone is “high‑risk” just because of their caste, not because of their actual financial situation. This problem is even worse in microfinance. Studies show that about 66% of Dalit applicants are rejected , even when they meet the same conditions as others. There is also a difference between how Scheduled Castes (SCs) and Scheduled Tribes (STs) are treated. SCs face general discrimination. STs face a special kind of bias: even when they apply, their approval rate is only around 77% , while other groups get 85–88% approval. A lot of this discrimination becomes hidden inside algorithms used by lenders. These systems are ...
Caste as an Economic Architect In the Indian socio-economic landscape, the caste system is far more than a social relic; it is a rigid hierarchy and a "core facet of Indian cultural identity" that functions as a primary architect of economic opportunity. While the 1950 Constitution sought to abolish discrimination, these ancient divisions continue to dictate the distribution of resources, occupations, and—critically—access to the capital required for upward mobility. The Indian caste hierarchy is traditionally categorized into five tiers, each with distinct historical roles and modern-day footprints in the credit market: · Brahmins: Traditionally the priestly and academic class. Today, they occupy the highest relative status in the credit market, possessing the highest levels of human capital (averaging 7.45 years of education). · Kshatriyas: The ruling, administrative, and warrior class. · ...