60-65% of India's household gold loan market remains untapped, report Jefferies

The gold loan market in The goldemains largely India remains largely untapped.

- 

According to a report by investment banking and capital market firm Jefferies organized gold financiers account for just 5-6 per cent of the country's household gold tonnages and 40 per cent of the gold loan business.

The report suggests a significant portion, around 60-65 per cent of gold loans still happen through unorganized channels.

Agri Gold loans and NonBanking Financial Companies (NBFCs) each accounts for 14 per cent of the gold loan portfolio, and banking channels give about 7 per cent of gold loans.

However, over the past decade, the organized gold loan market has seen steady growth, with the total assets under management (AUM) rising by 12 per cent annually to reach approximately Rs 6.2 trillion as of March 2023.

This growth has been mainly driven by formal lenders like banks and NonBanking Financial Companies (NBFCs), which have expanded their reach and offered more competitive interest rates, ranging from 9-26 per cent, compared to the 25-45 per cent charged by unorganized lenders.

Banks have been traditionally dominated the organized gold loan market, holding over 75 per cent of the market share. Nearly 80 per cent of these are given for agricultural gold loans.