Organized gold loan market in india is projected to double in next five years to Rs 14.19 lakh crore as per PWC’s latest report titled ‘Striking gold: The rise of India’s gold loan market’ .This growth is projected despite forecasted moderation resulting from increased regulations, competition from fintech’s and shrinking retail jewelry volumes. Formalization of gold loan sector is considered as primary driver for this growth
The process of formalization of gold loans has been significantly influenced by increasing levels of urbanization. This expansion is facilitated by the establishment of new branches, the introduction of digitalproducts, and, notably, the provision of more attractive interest rates and customer service tailored to theneeds of urban and rural customers. The report said .
Gold ETF’s have recorded 4 year CAGR of 50.37% and grown to a total asset value of INR 22737 Crore by March 2023 .
“The gold loan market is set for further growth, driven by the sustained increase in per-gram gold rates andcustomer demand. The unorganised sector accounts for 63% of the gold loan market, while organized players like banks and NBFCs have a 37% share. There is a huge opportunity for organised players togrow the gold loan market in India”
The report further articulates challenges in the sector and potential ways to mitigate them through adoption of tech and new operating models .
Muthoot Finance – India’s largest gold loan player have already reported one of their best quarterly performance in Q1 -FY 25 .
Download the full report here : https://www.pwc.in/assets/pdfs/striking-gold-rise-indias-gold-loan-market.pdf
