Gold loans have grown at CAGR of 20% in last 5 years

India's gold loan market has increased from USD 33 billion in FY19 to USD 83 billion in FY24, growing at a compound annual growth rate (CAGR) of 20 per cent, according to Praxis Global Alliance report.Gold loans have always been a popular way for Indians to borrow money.

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With a strong cultural link to gold, many families keep gold as part of their savings. Borrowing against gold is quick and easy, making it a preferred option for people from all income groups.

The market includes both formal lenders like banks and non-banking financial companies (NBFCs), as well as informal moneylenders in villages and towns. One of the main reasons for the gold loan market's growth is the increasing trust in formal lending channels.

Regulatory improvements have made borrowing safer and more transparent, encouraging people to choose banks and NBFCs over informal lenders. Government efforts to promote financial inclusion have also helped build confidence in formal lenders.