Gold loan market to grow to over Rs 3 lakh crore
The organised gold loan market in India is expected to grow to over Rs 3 lakh crore by 2020 at a three-year Compound Annual Growth Rate (CAGR) of 13.7 %.
“Industry projections say the organised gold loan market in India will grow to Rs 3,101 billion by 2020 at a three-year CAGR of 13.7 percent,” a KPMG release said.
Gold loan companies are expected “to continue delinking the gold price volatility risk by offering more variants of lower tenure loan products”. Noting that increased competition from small finance banks are having a yield reducing impact, the report said the gold loan space is likely to see “interesting partnerships with fintechs (financial technology companies) to help streamline and automate processes”. The report has identified factors such as exclusion from mainstream personal and retail loans by commercial banks, and changing attitudes to applying for gold loans, as the growth drivers of the gold loan market in India.
