Gold lending market to reach Rs 4.617 billion by 2022

INDIA’s gold lending market is expected to reach Rs 4.617 billion by 2022 at a five-year compound annual growth rate of 13.4%, according to a KPMG report.

The 2018-19 fiscal year saw gold lending companies aggressively expand their branch network in the northern and eastern states of the country, he said.

“Going forward, these companies should focus on optimizing the use of their assets and leveraging their existing branch infrastructure to maximize branch-level assets under management and the reach of the branch. clientele, ”KPMG India said in the“ Gold Financiers Return to the Indian Organized Lending Market ”report. .

The urgency of online and digital models in the gold lending space by NBFCs and new age fintech players delivering gold loans at the customer’s doorstep has opened up an untapped market among activated customers. digitally, he said.

Incumbents in the sector should “invest more” in developing “digital integration capabilities” that are essential to capture this segment of tech-savvy customers, he added.

The organized gold lending market comprising banks, non-bank financial corporations (NBFCs) and Nidhi companies contributes nearly 35 percent of the Indian gold lending market.

According to the report, today’s gold lending companies compete not only with other players, but also with financial service providers. Although the size of the unorganized gold lending industry, which is estimated to be three times the size of the organized sector, may imply significant growth potential and is actively encroached by financial services players offering lending unsecured, he said.

In recent years, the major players in gold credit have reached geographic saturation and are now exploring other financial products such as microfinance and loans to SMEs to maintain their growth. Customers who previously had to pledge gold to fund their emergency cash shortages, durable purchases and vacations now have a risk-free opportunity to raise funds without providing any collateral.

Priscilla C. Carnegie