India gold loan market hits ₹14.5 lakh crore as demand accelerates

Hyderabad: India’s gold loan market grew sharply as gold loan (Non-Banking Financial Company) NBFCs recorded ₹14.5 lakh crore in outstanding loans by September. ICRA (Investment Information and Credit Rating Agency) said the value stood 36 per cent higher than last year’s figure for the same period. The agency expects the sector to touch ₹15 lakh crore by March if the current trend continues. Borrowers turned toward gold loans because gold prices surged and lenders limited unsecured credit.

India’s gold loan market drives aggressive NBFC expansion

Gold prices climbed nearly 60 per cent this year, and the increase pushed more families, farmers and small traders to use gold for quick access to credit. Microfinance institutions held back unsecured lending, so customers shifted to collateral-backed loans. NBFCs offered 70 to 80 per cent of the gold value, and that level encouraged wider borrowing. ICRA forecasts 30 to 35 per cent growth for the Indian gold loan market in the next financial year.

NBFCs moved to capture the rising demand. Companies plan about 3,000 new branches nationwide for next year. Muthoot Finance, Bajaj Finance and IIFL Finance will open 1,800 of them. L&T Finance and Poonawalla Fincorp also began expanding into the segment, while market observers believe Jio Finance may follow. Strong gold prices continued to support loan activity and strengthened the expansion plans of major lenders.