Growing market of gold loan, AUM of NBFCs will cross Rs 4 lakh crore by 2027; Growth is coming due to these 3 reasons
Agency, New Delhi. The business of non-banking financial companies (NBFCs) that provide loans against gold jewelery is growing rapidly. According to the report of rating agency Crisil (Crisil Report), the assets under management (AUM) of NBFCs providing gold loans may increase at the rate of about 40 percent by the next financial year. By March 2027, this figure is estimated to exceed Rs 4 lakh crore.
Growth in gold loans is coming due to these three reasons
The report says that there are three major reasons for this rapid growth – continuously rising gold prices, increasing demand for secured loans and improvement in the regulatory environment. The annual growth rate of these companies between the financial years 2023-24 and 2024-25 was 27 percent. At the same time, in the first nine months of the financial year 2025-26, gold prices have jumped by about 68 percent to a record level.
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Scope to distribute more loans to NBFCs
According to Aparna Kirubakaran, Director, CRISIL Ratings, due to increase in gold prices, the value of pledged gold has also increased. This has given scope to NBFCs to distribute more loans. He said that due to limited options for unsecured loans, customers are now turning more towards secured loans i.e. gold loans.
To take advantage of this opportunity, large and medium gold loan NBFCs are expanding their business scope despite tough competition from the banking sector. While large companies are strengthening their portfolios within their existing branches, medium-sized NBFCs are opening new branches as well as playing the role of loan generation partners for banks and larger NBFCs.
The report also said that the relaxation in 'loan-to-value' (LTV) norms for low-value gold loans, effective from April 1, will further increase the lending capacity of NBFCs. However, the agency cautioned that risk management will remain critical, especially as it will require strictness in checking the purity, weight and genuineness of the gold pledged.
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