KPMG Unveils Massive Growth Potential of India’s Gold Loan Market

SEATTLE (Scrap Monster):  The latest report published by KPMG forecasts tremendous growth to India’s gold loan market in the near term. The market is likely to hit INR 4,617 billion by 2022, recording a five-year CAGR growth of 13.4%.

The report titled ‘Return of gold financiers in India’s organized lending market’ noted that gold loan companies have aggressively expanded their branch network across the northern and eastern states during the fiscal year 2018-’19. Going forward, the companies are likely to maximize the branch-level AUM and customer reach through optimization of existing branch infrastructure, it said.

The emergence of online and digital models by NBFCs and other industry players tend to tap potential market among digitally-enabled customers by offering gold loans at the customers’ doorsteps. The industry participants are likely to invest in further expanding their digital capabilities in the years to come, KPMG noted.

ALSO READ: India's Gold Loan NBFCs Target Robust Growth

The organized gold loan market, comprising of banks and NBFCs, account for nearly 35% of the Indian gold loan market. The report foresees significant growth potential for unorganized gold loan sector. Over the past few years, major gold loan players have achieved geographical saturation.

The volatility in gold prices and liquidity stress in NBFCs will continue to impact gold loan market performance, KPMG report added.