Daijiworld Media Network - New Delhi
New Delhi, Apr 14: A new report by TransUnion CIBIL reveals a sharp expansion in India’s gold loan market, with total loan balances increasing nearly fourfold over the past three years. The rising trend reflects growing consumer trust in gold-backed financing and its emergence as a mainstream credit option.
The report highlights that gold loans now account for around 11% of India’s retail credit portfolio as of December 2025, up from 5.9% in March 2022, making it the second-largest retail credit segment by balance share.
One of the key trends is the significant rise in loan sizes. The average gold loan per account has nearly doubled—from about Rs 1.1 lakh in 2022 to Rs 1.9 lakh in 2025. Similarly, the average ticket size has surged from roughly ?90,000 in early 2022 to nearly Rs 2 lakh by late 2025, indicating higher borrowing needs and increased lender confidence.
Growth has been fueled by multiple factors:
• Wider borrower adoption, including more women and financially stronger individuals
• Increased participation by lenders
• Expansion beyond traditional markets
Non-Banking Financial Companies (NBFCs) have notably increased their share in gold loan balances, while public sector banks continue to dominate the segment, further strengthening their position during this period.
The borrower base is also evolving. A greater proportion now comes from “prime” and “above-prime” categories, rising from 43% in 2022 to around 52% in 2025. At the same time, the share of new-to-credit customers has declined, pointing to a more mature and diversified lending ecosystem.
Women borrowers are playing a crucial role in this growth, contributing nearly 39% of gold loan originations in 2025. Demand has expanded not only in traditional southern markets but also across states like Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, and Madhya Pradesh.
However, the rapid rise in lending has also brought some concerns. Borrower leverage is increasing, with average outstanding loans per borrower rising significantly. Additionally, higher-value loans (above Rs 2.5 lakh) are showing relatively higher delinquency rates compared to smaller loans.
Commenting on the trend, Bhavesh Jain noted that gold has long held cultural and financial importance in India, but the current growth signals a structural shift. Gold loans, he said, are becoming more organised, accessible, and widely accepted as a reliable form of secured credit.
Overall, the sector’s rapid expansion reflects both rising consumer demand and growing institutional confidence, though maintaining asset quality will remain a key challenge going forward.