The India Gold Loan Market to Be Fueled By NBFCs During the Forecast Period
Increasing gold prices, digital transformation and
diversification of loan offerings are the leading factors that will drive the
India gold loan market in the forecast years.
According to TechSci
Research report, “India Gold Loan Market– By Region, Competition
Forecast & Opportunities, 2019-2029F,” India gold loan market has grown
significantly in recent years and is dominated by organized players such as Muthoot
Finance, Manappuram Finance, and other smaller players.
The growth in the gold loan market in
India can be attributed to several factors, including the ease of securing
loans against gold, the relatively low interest rates compared to other types of
loans, and the lack of credit history or collateral requirements.
The Reserve Bank of India (RBI)
regulates the gold loan market and has issued guidelines to ensure that lending
practices are fair and transparent. The guidelines specify the maximum loan-to-value
ratio and other terms and conditions to protect both the borrower and lender.
The India gold loan market is
particularly attractive to borrowers in rural areas, where access to formal
banking services is limited, and gold is often seen as a safer store of value
than cash. The market is also attractive to small businesses and traders who
use gold loans to meet short-term working capital requirements.
Despite the growth in the India gold
loan market, there are concerns about over-leveraging by borrowers and the
potential for loan defaults, which could lead to a decline in the value of gold
as collateral. However, overall, the gold loan market in India is expected to
continue to grow, driven by strong demand for gold and the availability of
credit.
In India, both men and women contribute
towards the gold loan market. However, it is observed that women have a
significant contribution towards the gold loan market. This is because gold is
considered a valuable asset in Indian culture, and it is predominantly owned by
women in the form of jewelry. Women often pledge their gold jewelry to obtain
loans for various purposes like education, business, medical emergencies, etc.
Moreover, many banks and financial
institutions in India have also introduced special gold loan schemes
exclusively for women, offering lower interest rates, higher loan amounts, and
other benefits. This has further encouraged women to avail of gold loans and
has contributed to their higher participation in the gold loan market in India.
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The India Gold Loan Market is segmented
based on type of lenders, mode of disbursal, market type, end user, interest
rate, region and competitive landscape. Based on type of lenders the market is
segmented into Banks, NBFCs, Fintech, and Others (Local Providers, etc.). Based
on mode of disbursal the market is segmented into Cash, Cheque, and E-Transfer.
Based on market type the market is segmented into organized and unorganized.
Based on end user the market is fragmented into Salaried Middle Class,
Housewives, Traders, Micro-Enterprises, Self-Employed, Others. Based on
interest rate the market is segmented into Up to 10%, 11%-20%, 21%-30%,
31%-40%, Above 40%. Based on region, the market is divided into North, South,
East, West.
Major states like Delhi, Gujarat,
Karnataka, Maharashtra, and Andhra Pradesh are leading in the provision of gold
loans as a result of an increase in demand. Furthermore, market is cities,
including Hyderabad, Bengaluru, Chennai, Pune, Delhi, Rajkot, and Surat, are
doing remarkably well. However, various gold loan companies are aggressively
expanding their network across the northern and eastern Indian states, where
market penetration was low.
Key market players in the India Gold
Loan Market include:
- Muthoot Finance Ltd
- Manappuram Finance
Ltd
- Union Bank of India
- State Bank of India
- Kotak Mahindra Bank
Ltd.
- ICICI Bank Ltd.
- HDFC Bank Ltd
- AXIS Bank Ltd.
- Central Bank of
India
- Federal Bank Ltd.
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“The Indian gold loan market is
primarily driven by the cultural significance of gold, the ease of securing
loans against gold, and the availability of credit. One of the significant
trends in the industry is the increasing adoption of digitalization to improve
customer experience and operational efficiency. However, the market faces
challenges such as over-leveraging by borrowers, loan defaults, and competition
from other types of loans. Additionally, the industry is highly regulated by
the Reserve Bank of India, which requires adherence to strict guidelines and regulations.
Despite these challenges, the Indian gold loan market is expected to continue
to grow, driven by the strong demand for gold and the availability of credit.” said
Mr. Karan Chechi, Research Director with TechSci Research, a research based global
management consulting firm.
“India Gold Loan Market By
Type of Lenders (Banks, NBFCs, Fintech, and Others (Local Providers, etc.)), By
Mode of Disbursal (Cash, Cheque, and E-Transfer), By Market Type (Organized and
Unorganized), By End User (Salaried Middle Class, Housewives, Traders,
Micro-Enterprises, Self-Employed, Others) By Interest Rate (Up to 10%, 11%-20%,
21%-30%, 31%-40%, Above 40%), By Region, Competition Forecast &
Opportunities, 2019-2029F,” has evaluated the future growth potential of Gold Loan Market
in India and provides
statistics and information on market structure, size, share and future growth.
The report is intended to provide cutting-edge market intelligence and help
decision makers take sound investment decisions. Besides, the report also
identifies and analyzes the emerging trends along with essential drivers,
challenges and opportunities present in India Gold Loan market.
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