Gold loans shine in India's credit mix, scaling 4X in three years: Report

New Delhi [India], December 30 : Gold loans have quietly emerged as one of the most resilient and fastest-growing credit segments in the lending space in past few years amid spotlight on unsecured retail credit and digital lending.

According to a reports based on the insights shared by the experts at the Antique Stock Broking's BFSI Conference 2025, gold loans have scaled nearly four-fold over the past three years, supported by rising gold prices, higher average ticket sizes, and sustained demand from semi-urban and rural borrowers.

It was highlighted at the conference that over 60% of new retail loan originations now come from semi-urban and rural regions, where gold remains a culturally accepted and liquid form of collateral.

Delinquencies are structurally higher in semi-urban and rural regions, necessitating sharper pricing and underwriting discipline.

In these markets, gold loans are often preferred over unsecured credit due to faster disbursements, flexible repayment options and lower effective interest rates, the report said.

Experts shared that since the gold loans offer lower credit costs, faster churn, and strong cross-sell opportunities, it makes them an attractive growth lever at a time when underwriting discipline has tightened across the system.

Several banks and SFBs indicated plans to expand gold loan distribution deeper into branch networks over the next two years, positioning the product as a core balance-sheet stabiliser.

Even the Micro Finance Institutions (MFIs) are increasingly evaluating secured products like gold loans and other secured LAP product as pure-play microfinance growth becomes structurally constrained.

Further, the report also suggested that the lenders across banks, NBFCs and fintechs are consciously recalibrating growth strategies, prioritising asset quality, secured lending and profitability over aggressive balance-sheet expansion.

Growth is now skewed towards secured retail products such as home loans, gold loans, loans against property and MSME financing, while corporate credit and unsecured retail segments are yet to see a meaningful revival.

Microfinance and small-ticket unsecured lending remain subdued as lenders tighten underwriting and focus on collections.

Recently, the Reserve Bank of India's State of the Economy report for December 2025 also said the Bank credit data show that loans against gold jewellery have been recording triple-digit growth rates since February 2025, far outpacing overall credit expansion.

While gold loans still account for a relatively small share of total non-food credit, their proportion has nearly doubled over the past year, indicating a rapid change in borrowing preferences, it said.

As per the recent RBI data, the loans against gold jewellery have become the unlikely star of retail credit with outstanding balances in this category surging 128.5% year-on-year to Rs 3.38 lakh crore in October 2025.

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