According to Muthoot FinCorp and a Jefferies India report, gold loans grew 42% year-on-year to ₹15.6 trillion as of November 2025. Retail loans against gold jewellery jumped 93%, while bank gold loans surged 127% compared with the previous year.
Shaji Varghese, CEO of Muthoot FinCorp, described the growth as a structural shift.
“The present momentum in the gold loan segment should be seen as a structural evolution rather than a price-led cycle. Gold loans are no longer viewed as a last-resort borrowing option. Increasingly, MSMEs, small traders, and households are using them as a planned and disciplined source of liquidity to manage business cash flows, agricultural cycles, and short-term financial requirements,” he said.
Varghese added that borrowers are gradually moving away from informal lenders to regulated NBFCs and banks, drawn by transparency, customer protection, and regulatory clarity.
“India holds significant household gold that remains economically idle, and greater awareness around monetising this asset without parting with ownership is expanding adoption across segments,” he noted.
The Jefferies report also highlighted rising competition in the sector. New entrants and mid-sized NBFCs have added over 900 branches in FY26 so far. Large NBFCs, including Muthoot and Manappuram, are expected to further expand their branch networks if the RBI relaxes prior approval requirements for new branches.
Branch productivity remains a key differentiator. Muthoot FinCorp reports an average assets-under-management (AUM) of ₹281 million per branch, significantly higher than peers, reflecting efficient operations and lower costs per loan.
High gold prices, up 17% year-to-date, continue to support growth and valuations. Analysts see a favourable risk-reward for leading players, as strong fundamentals and disciplined lending practices underpin sustainable expansion.
First Published: Feb 26, 2026 2:35 PM IST
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