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India's <keyword id="22879519" type="General" weightage="20" keywordseo="organised-gold-loan-market" source="keywords">organised gold loan market</keyword> is projected to double in the next five years to Rs 14.19 lakh crore despite expected moderation in growth due to stricter regulations, according to a <keyword id="19938520" type="General" weightage="20" keywordseo="PwC-India" source="keywords" meta.keywordsubtype="org" meta.entityname="PwC India" meta.hostid="153" meta.entityid="PwC India">PwC India</keyword> report. In fiscal 2023-24, the organised <keyword id="21627536" type="General" weightage="100" keywordseo="gold-loan-market" source="keywords">gold loan market</keyword> demonstrated substantial growth, reaching a valuation of Rs 7.1 lakh crore, according to the report titled 'Striking gold: The rise of India's gold loan market' . "It is expected to reach around Rs 14.19 lakh crore by FY 2029 at a five-year CAGR of 14.85 %," it said. Indian families own massive quantities of gold, estimated at 25,000 tonne. Existing gold holdings with <keyword id="19895507" type="General" weightage="20" keywordseo="Indian-households" source="keywords">Indian households</keyword> are valued at roughly Rs 126 lakh crore, the report said. It further said the gold loan market is poised to see moderate growth over the next two years, as gold lenders are facing increased scrutiny from regulatory authorities regarding loan-to-value (LTV) maintenance and auction-related procedures. "The second-largest player in the gold loan market being inactive would have an impact on market growth in FY25," the report said. Also, the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s advisory to <keyword id="19938300" type="General" weightage="20" keywordseo="NBFCs" source="keywords">NBFCs</keyword> on cash disbursement, which limits the amount of cash disbursal to Rs 20,000, could push customers to rely on the unorganised sector. The regulator has also raised concerns about the evaluation process for lending activities through fintech startups. The increased regulatory scrutiny and revised guidelines have led to a dip in the share prices of leading NBFCs, PwC said. "Gold loan lenders are expected to use this period to ensure that they are compliant with all regulatory guidelines while undertaking several measures to optimise their middle and back offices through digitisation initiatives," it said. Lenders are also expected to implement cost optimisation initiatives that will help drive up the bottom-line profitability of their companies and enhance investor confidence which has slightly depleted as a result of the regulatory scrutiny. Furthermore, the report said rising gold prices over the past financial year may also drive lenders to take a cautious approach to lending rates and pricing as any downward movement in gold prices will result in a substantial LTV breach that will further create operational issues for lenders in the form of auctions. "The growth of the gold loan market is expected to be steered by both banks and NBFCs," the report said. The emergence of digital gold loan aggregator platforms and their strategic collaboration with gold loan lenders such as banks and NBFCs will be a key driving factor for the growth of the industry, enabling gold loan lenders to tap into a previously untapped segment of digitally savvy customers. "While the forecasted growth of the gold loan market means potential growth for all players, the impact on the players may vary. Banks are expected to benefit from their lower interest rates," PwC said. Jaikrishnan G, Partner (Financial Services), PwC India said lending against gold is the oldest form of credit. It remains one of the most attractive options for consumer as well as lenders. "High return-on-assets, manageable risk, timely regulatory interventions, growing adoption, tech-enabled operating models have all contributed to sector growth. As India embraces the vision of Viksit Bharat, gold loans will provide much needed liquidity and credit access to growing small and medium entrepreneur segments," he said. The report further said growth by NBFCs is expected to be fuelled by their expansion and increased outreach to regions with low penetration, bringing new credit customers to the financial services ecosystem. Also, fintechs will play a critical role in bringing in the required technology and innovation into the industry, thus helping lenders to create unique product propositions to boost growth, it said. <keyword id="20037818" type="General" weightage="20" keywordseo="South-India" source="keywords">South India</keyword> contributes to a vast extent, as it emerges as the dominant market for gold loans, with 79.1% share of the total outstanding loans. The report also noted that an assumption can be made that the entire Rs 126 lakh crore worth of gold will not be available for pledging due to various reasons like jewelry belonging to religious institutions, jewellery with emotional value, and certain jewellery held by individuals who are not in need of finance.

Gold loan market projected to double in 5 years to Rs 14.19 lakh crore, says PwC India's report

The <keyword id="21627536" type="General" weightage="100" keywordseo="gold-loan-market" source="keywords">gold loan market</keyword> in <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> is on the cusp of substantial growth, driven by rising per-gram gold rates and increasing customer demand. Currently, the market is predominantly controlled by the <keyword id="21485305" type="General" weightage="20" keywordseo="unorganized-sector" source="keywords">unorganized sector</keyword>, which holds a 63 % share, while <keyword id="22789155" type="General" weightage="20" keywordseo="organized-players" source="keywords">organized players</keyword>, including banks and Non-Banking Financial Companies (<keyword id="19938300" type="General" weightage="20" keywordseo="NBFCs" source="keywords">NBFCs</keyword>), account for the remaining 37 %, according to a recent <keyword id="20055667" type="General" weightage="20" keywordseo="PwC" source="keywords" meta.keywordsubtype="org" meta.entityname="PwC" meta.hostid="83" meta.entityid="PwC">PwC</keyword> report. Indian households are estimated to possess approximately 25,000 tonnes of gold, valued at around Rs 126 lakh crore. Despite this vast wealth, the existing gold loan market through organized channels is valued at just Rs 7.1 lakh crore. With the market penetration of gold loans in India currently at only 5.6%, there is considerable untapped potential within <keyword id="22902023" type="General" weightage="20" keywordseo="household-gold-holdings" source="keywords">household gold holdings</keyword>. Although not all gold is available for pledging--due to factors such as religious significance, emotional value, or lack of financial need--there remains substantial opportunity for growth in the gold loan sector. The gold loan market in India has historically been dominated by the unorganized sector. However, in recent years, organised players, particularly NBFCs, have begun to gain market share. Banks, too, have been making inroads, especially through retail gold loans and a continued focus on agricultural gold loans. This shift is expected to continue as organised players leverage their formal lending structures, transparency, and customer trust to capture a larger share of the market. Shaji Varghese, CEO, Muthoot FinCorp Limited, "Gold loan assets have been growing steadily and the potential to grow further is high since a major part of the country's gold loan market is still in the unorganized sector. <keyword id="19910265" type="General" weightage="20" keywordseo="gold-prices" source="keywords">Gold prices</keyword> have been rising over the years. There is also a paradigm shift on how buying gold is perceived today. Traditionally gold was purchased for historical, cultural and societal reasons and while that continues, people have started buying gold as an investment and also as a convenient option to raise funds for financial requirements." India remains one of the world's largest consumers of gold, with total demand reaching 747 tonnes in 2023. However, this represented a 3% decrease compared to the previous year, primarily due to the surge in gold prices, which dampened demand for gold jewellery. The price of gold in India increased from Rs 55,375 to Rs 66,532 per 10 grams (22 carats) between November 2023 and May 2024, prompting a shift towards lightweight or lower-carat jewellery items. Globally, the demand for gold grew by 3 % in 2023, with China emerging as the largest market. The global market's expansion presents opportunities for Indian gold loan financiers to explore new avenues for growth beyond domestic borders. Gold's relationship with the US dollar is a key factor influencing gold prices in India. A weakening rupee often leads to an increase in gold prices, as gold is priced in USD internationally. This dynamic drives higher imports and increases the cost of gold in rupees, further fuelling demand as investors seek a safe haven against currency fluctuations. V.P. Nandakumar, Managing Director and Chief Executive Officer, Manappuram Finance Ltd, "Of late, the sharp increase in gold prices has imparted some stability to the gold loan book of most players and we do not expect gold prices to come down due to geo-political factors, the accumulation of gold by central banks as well as the lasting allure of the yellow metal." The securitisation of gold through various financial instruments offers new avenues for gold loan players to diversify their offerings. By using gold-based security as collateral, established players can introduce new loan products that leverage the intrinsic value of physical gold.

India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

New Delhi, Non-Banking Financial Company (NBFC) <keyword id="3504742" type="General" weightage="20" keywordseo="IIFL-finance" source="Orion">IIFL Finance</keyword> has become the second largest gold loan provider surpassing Manappuram Finance. "The gold loan portfolio has crossed Rs 23,690 crore assets under management (AUM), surpassing Manappuram Finance at Rs 20,809 crore worth of gold loan AUM. "This has cemented <keyword id="82050" type="General" weightage="20" keywordseo="IIFL" source="Orion">IIFL</keyword> Finance's position as the second largest gold loan provider in India in terms of AUM," IIFL Finance head of Gold Loan Business Saurabh Kumar, said. The market leader in gold loans is Muthoot Finance with an AUM of Rs 66,089 crore, as of September 2023. Kumar said, "the company has about 18.6 lakh customers and over 70 per cent of our customers are repeat customers helped by customer centric approaches like repayment grace period, no foreclosure charges, transparency in dealings and proactive customer need identification." The company expects a 25-27 per cent increase in gold loan in FY'24, he said. IIFL Finances provides gold loans through 1,486 towns and rural areas across 25 states and 4 Union Territories to salaried, self-employed and Micro, Small and Medium Enterprises (MSME) customer segments. Besides, gold loan, IIFL Finance offers affordable home loan, microfinance loans and business loans and has a consolidated AUM of Rs 73,066 crore.

IIFL Finance emerges as second largest gold loan NBFC

Mumbai, The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> on Friday announced doubling the lending limits for <keyword id="185013" type="General" weightage="20" keywordseo="gold-loans" source="Orion">gold loans</keyword> under the bullet repayment scheme for <keyword id="117575" type="General" weightage="50" keywordseo="urban-cooperative-banks" source="Orion">urban cooperative banks</keyword> to Rs 4 lakh. "It has been decided to increase the existing limit for gold loans under the bullet repayment scheme from Rs 2 lakh to Rs 4 lakh in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023," <keyword id="30067" type="General" weightage="100" keywordseo="rbi" source="Orion">RBI</keyword> Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said. A bullet repayment scheme is one where a borrower repays interest and the principal amount at the end of a loan tenure without worrying about repayment during the loan tenure. Das, who had a meeting with top brass of UCBs recently, said the measure is in line with the RBI's earlier announcement of providing "suitable incentives" to UCBs that have met the prescribed PSL targets, wherein a lender is mandated to devote a certain part of its overall lending for the marginalised sector. Speaking after announcing the bi-monthly policy review, Das also announced that the RBI will be issuing a comprehensive regulatory framework on project finance. "With a view to strengthen the extant regulatory framework governing project finance and to harmonise the instructions across all regulated entities, the extant prudential norms for projects under implementation have been reviewed," he said, adding that detailed draft guidelines will be released for public comments. He also announced that non-bank lenders in the 'middle and base layers' will be permitted to use Credit Risk Mitigation instruments for reducing their counter party exposure under the credit concentration norms, just like their peers classified in the 'upper layer' are allowed to right now. The RBI is also mulling introducing Card-on-File Tokenisation (CoFT) creation facilities directly at the issuer bank level, given the growing acceptance and benefits of tokenisation of card data, Das said, adding that this will help make e-commerce transactions more convenient.

RBI doubles bullet repayment gold loan limits for urban co-op banks to Rs 4 lakh

<ul><li>Borrowers can get loans of up to 75% of the <keyword id="18712" type="General" weightage="20" keywordseo="gold" source="Orion">gold</keyword>'s appraised value, as mandated by RBI regulations. </li><li>Before getting a <keyword id="130134" type="General" weightage="20" keywordseo="gold-loan" source="Orion">gold loan</keyword>, it is crucial to research and compare various lenders in the market. </li><li>The choice of repayment tenure and frequency can significantly influence the interest rate on your gold loan. </li></ul>A gold loan is a secured loan where borrowers pledge their gold jewellery as <keyword id="125948" type="General" weightage="20" keywordseo="collateral" source="Orion">collateral</keyword>. It offers quick approval, minimal documentation, no credit checks, competitive interest rates, and flexible loan amounts based on the gold's value. Since a gold loan is a secured loan, the interest rates are lower than <keyword id="1548041" type="General" weightage="20" keywordseo="unsecured" source="Orion">unsecured</keyword> loans like personal loans. Interest rates on gold loans can vary between 8.5% to 11% per annum or more in some cases. Here are five essential tips to help you secure the best interest rates when applying for a loan against your gold jewellery. <cmsannotation type="cmsannotation" annotationid="Conduct thorough research" comment="Subhead" text="Conduct thorough research">Conduct thorough research</cmsannotation> Before getting a gold loan, it is crucial to research and compare various lenders in the market. Different financial institutions and lenders offer varying gold loan interest rates, so doing your research can save you a substantial amount of money in the long run. <cmsannotation type="cmsannotation" annotationid="Understanding loan- to- value ratio" comment="Subhead" text="Understanding loan- to- value ratio">Understanding loan- to- value ratio</cmsannotation> One of the most critical factors impacting gold loan interest rates is the loan-to-value (LTV) ratio. This ratio determines how much money you can borrow against the value of your gold. Borrowers can get loans of up to 75% of the gold's appraised value, as mandated by RBI regulations. <cmsannotation type="cmsannotation" annotationid="Choose the right repayment plan" comment="Subhead" text="Choose the right repayment plan">Choose the right repayment plan</cmsannotation> The choice of repayment tenure and frequency can significantly influence the interest rate on your gold loan. Opting for a shorter repayment period with more frequent instalments can often lead to a lower interest rate. On the other hand, selecting a longer repayment plan with fewer payment intervals may result in a higher interest rate. You can choose to repay your interest on a monthly, bi-monthly, quarterly, half-yearly, or annual basis as per your convenience. <cmsannotation type="cmsannotation" annotationid="Monitor gold market prices" comment="Subhead" text="Monitor gold market prices">Monitor gold market prices</cmsannotation> Interest rates on gold loans can be affected by external factors unrelated to the loan itself. Keep a close eye on fluctuations in global gold prices, as they can impact interest rates. Generally, when the price of gold rises, interest rates tend to decrease, making loan repayment more manageable. Being aware of these market trends can help you time your gold loan application to secure the best interest rates. <cmsannotation type="cmsannotation" annotationid="Maintain a stable income" comment="Subhead" text="Maintain a stable income">Maintain a stable income</cmsannotation> Some lenders may request proof of your monthly income during the gold loan application process. Demonstrating a steady income source can work in your favour, as it shows your ability to repay the loan. This can lead to lenders offering you lower interest rates. However, many lenders do not require income proof for a gold loan application. In such cases, your KYC documents are sufficient. By understanding the loan-to-value ratio, selecting an appropriate repayment plan, monitoring gold market prices, and maintaining a stable income source, borrowers can increase their chances of securing favourable terms for their loan against gold. Keep these tips in mind to make the most out of your gold assets while securing the funds you need.

Getting a gold loan? Here is how to get the best interest rates

<ul><li><keyword id="163007" type="General" weightage="20" keywordseo="muthoot-finance" source="Orion">Muthoot Finance</keyword> is one of the largest <keyword id="130134" type="General" weightage="20" keywordseo="gold-loan" source="Orion">gold loan</keyword> NBFC in India and it has been using its <keyword id="6354839" type="General" weightage="20" keywordseo="marketing" source="Orion">marketing</keyword> strategies effectively to make the brand a household name.</li><li><keyword id="9213956" type="General" weightage="20" keywordseo="abhinav-iyer" source="Orion">Abhinav Iyer</keyword>, GM, Marketing &amp; Strategy, Muthoot Finance tells us all the brand has been doing to not only grow its business but also to grow the category as a whole.</li></ul>It is no secret that Indians love gold. In fact, gold accounts for a large part of most Indian family’s wealth. While for years, securing loans against jewellery was looked at as a last resort, the last few years, especially the pandemic, has brought about an attitudinal shift in Indian consumers. Gold loans have been on a consistent rise over the last few years and this growth is coming from both micro enterprises and individuals. The pandemic hit many businesses and while things have been slowly moving towards normalcy, a lot of sectors still remain impacted, and people are still trying to find the balance. In such a scenario, gold loan has come up as both a convenient as well as a quick option to get cash. Over the years, there has been a shift in perception when it comes to taking a loan out on gold jewellery and one brand that has been trying to help the segment grow by trying to fasten this change is Muthoot Finance. Over the last few years, the brand has consistently stayed in the public consciousness with its marketing strategies. <keyword id="6357912" type="General" weightage="20" keywordseo="amitabh-bachchan" source="Orion">Amitabh Bachchan</keyword> has been a face of the brand for four years now. It has also been the Principal Team Partner for Chennai Super Kings, having turned it into a trusted, household name. <div type="Youtube" id="WZl9-VYIErY" title="Muthoot Finance - Haathi Pe Bharosa Karogey Toh Pakka Jeetogey - 2.5 Lakh Customers" thumbUrl="https://i.ytimg.com/vi/WZl9-VYIErY/mqdefault.jpg"></div> <div type="Youtube" id="ZpFUp9_P4X8" title="Muthoot Finance- Haathi Pe Bharosa Karogey Toh Pakka Jeetogey!" thumbUrl="https://i.ytimg.com/vi/ZpFUp9_P4X8/mqdefault.jpg"></div> We recently caught up with Abhinav Iyer, GM, Marketing &amp; Strategy, Muthoot Finance to understand how the pandemic impacted the company’s business and the role the brand has been playing in not only educating consumers about the sector but also helping the sector grow. Muthoot Finance’s growth story While the pandemic was not kind to many sectors and businesses, Muthoot Finance was able to sustain its growth, Iyer tells us. The consolidated AUM has grown by nearly 80% in the last three financial years from 2017-18 to 2020-21. Its consolidated net profit has grown by 114% during the same period. In other words, it has more than doubled during the said period. “We have grown considerably when it comes to our book size in the last few years. This year too, we are looking at growing our book size by 15%. We have made similar growth in terms of percentages when it comes to our profitability too. We serve over 2.5 lakh customers every day through our network of over 5000 branches. Contrary to common perception that we are a South-based brand, we are today a national brand, and grown consistently over the last decade,” shared Iyer. The brand has also been on an expansion mode. Over the last 2-3 years, it has added over 200 branches across the country. “If stock prices are a testament, we have made a healthy northward stride. From every stretch of imagination, we have grown, in terms of our physical branch presence, our customer base and our profitability over the last two, three years. And our marketing strategies have contributed considerably to this healthy and sustained growth,” added Iyer. Creating a winning marketing strategy It is often said that during times of crises, marketing budgets are usually the first to get slashed. We saw a lot of brands that stopped communicating with its consumers during the pandemic. However, Muthoot Finance is one brand that does not believe in this. In fact, it believes in staying in the public consciousness, staying constantly engaged. It has a half-yearly marketing strategy where it comes up with a high decibel campaign every six months, a strategy that has worked well for it. The brand recently launched its campaign ‘Hathi pe bharosa karoge toh pakka jeetoge’, featuring Amitabh Bachchan. The brand also recently launched the second season of its radio campaign called Muthoot Finance Sunheri Soch. At a time when more and more brands are steadily increasing their spends on Digital, while decreasing spends on traditional mediums, Muthoot Finance is one brand that has been consistently using mediums like Print, Radio and Outdoor. Speaking about its latest radio campaign, Iyer said, “Storytelling is the oldest form of teaching’ and we also believe that radio has always been seen as a credible and authentic medium of communication, hence we chose it as our primary medium of communication to reach out to our target audience and new customers. We also wanted to have a female voice this season and bring freshness to the table, hence this year we are extremely delighted to partner with <keyword id="6355846" type="General" weightage="20" keywordseo="madhuri-dixit" source="Orion">Madhuri Dixit</keyword> for Season 2. We have extensively researched and customized our series to be launched via radio alongside strong amplification across all prominent digital channels. We recorded a significant increase in our new customer acquisition and queries post the launch of Season 1. Thus, we did not hold back ourselves in investing again in radio and celebrating the art of <keyword id="282281" type="General" weightage="20" keywordseo="storytelling" source="Orion">storytelling</keyword>." On why the brand continues to invest on traditional mediums while also investing on newer mediums like Digital, Iyer added, “We are a national brand with around 5440 branches across India. More than 70% of our branches are in semi-urban and rural areas. We have served nearly 70 crore customer (including repeat customers) since our inception. So from all those parameters, we are a large, spread-out, national brand. So its important that some of these mass mediums are always there as part of our media mix. It would never be possible for us to do away with any of the mass mediums because the reach from mass media is critical for us. Meanwhile, digital is also a very important cog in the wheel. In the last three years, our digital and our IT teams have been working tirelessly to ensure the technological upgradation of our products and services. We launched our Gold Loan at home offering during the pandemic. That was a huge value-add from a technology perspective. There was a time you had to visit a branch to repay your loan interest. Today, you can do that using any digital payment platform, our chatbot or our WhatsApp business account. So today, it is not compulsory for people to visit the branch physically for availing loans or paying their interest. We are also investing substantially on digital marketing. Atleast 10% of our marketing budget is invested into digital marketing.” He also added that TV still makes for the largest chunk, between 40-45% of its marketing budgets. On what it got right when it comes to its marketing strategy, Iyer said it was a combination of a few things. “In the last few years, we have been on a marketing transformation journey. Firstly, partnering with Mr Bachchan has helped us cut across geographies, gender and age groups. Secondly, we partnered with Chennai Super Kings in 2018 when they were just coming back after a short break. <keyword id="6354832" type="General" weightage="20" keywordseo="ms-dhoni" source="Orion">MS Dhoni</keyword> is also someone who enjoys almost the same stature that Mr Bachchan does in Bollywood. He’s a trustworthy, dependable and balanced individual. So our partnership with CSK helped us in the Tamil Nadu market where we have about 900-950 branches. We have also been using transit medium very effectively and The Greater Kailash metro station and the Nandanam station in Chennai have our branding and it has completely transformed the stations. We also came up with a unique initiative during the Kumbh mela when we created huge gold lockers to help devotees keep their valuables at a safe place. This campaign helped us win numerous awards. Lastly, over the years, we have created a culture of launching half-yearly campaigns, new communications to bring about an attitudinal change in the minds of people. We try to be present throughout the years on all major ATL and BTL mediums. I believe these strategies have helped us grow as we are also trying to grow the category.” Owing to its presence in smaller towns and cities, the brand also focuses a lot on regional communications. The brand puts out its communications in 11 languages to ensure its reach is far and wide. Future areas of focus In what the scope for the segment is in the future, Iyer said, “Overall there are around 25,000 tonnes of gold (household jewellery) in the country and less than 5% of it is monetized. So there’s a huge potential for growth, both for us and the industry as a whole. So the focus would be on getting new customers to try and opt for gold loans. Its also a very simple product, you only pay interest for the number of days for which you have availed the loan. There is a whole lot of customer benefits which can help people benefit from the product. So our primary objective, even from a marketing perspective would be to grow the category significantly and help the category prosper by itself. We will also constantly keep working on bringing about an attitudinal change in people through our marketing and communications,” concluded Iyer.

You Searched For "gold loan" and got 6 results

Gold loan market projected to double in 5 years to Rs 14.19 lakh crore, says PwC India's report

PTI

India's gold loan market set for rapid growth amid rising prices; unorganized sector holds 63% share, notes recent PwC report

ANI

IIFL Finance emerges as second largest gold loan NBFC

PTI

RBI doubles bullet repayment gold loan limits for urban co-op banks to Rs 4 lakh

PTI

Getting a gold loan? Here is how to get the best interest rates

BI India Bureau

Here’s how Muthoot Finance is bringing about a perception change around gold loans with its marketing initiatives

Samarpita Banerjee

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