India’s organised gold loan market is projected to double in next five years to Rs 14.19 lakh crore despite expected moderation in growth due to stricter regulations, said a PwC India report.
In fiscal 2023-24, the organised gold loan market demonstrated substantial growth, reaching a valuation of Rs 7.1 lakh crore, according to the report titled ‘Striking gold: The rise of India’s gold loan market’ .
“It is expected to reach around Rs 14.19 lakh crore by FY 2029 at a five-year CAGR of 14.85 per cent,” it said.
Indian families own massive quantities of gold, estimated at 25,000 tonne. Existing gold holdings with Indian households are valued at roughly Rs 126 lakh crore, the report said.
It further said the gold loan market is poised to see moderate growth over the next two years, as gold lenders are facing increased scrutiny from regulatory authorities regarding loan-to-value (LTV) maintenance and auction-related procedures.
“The second-largest player in the gold loan market being inactive would have an impact on market growth in FY25,” the report said.
Also, the RBI’s advisory to NBFCs on cash disbursement, which limits the amount of cash disbursal to Rs 20,000, could push customers to rely on the unorganised sector.
The regulator has also raised concerns about the evaluation process for lending activities through fintech startups.
The increased regulatory scrutiny and revised guidelines have led to a dip in the share prices of leading NBFCs, PwC said.
