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Gold Loans Dominate India's Retail Credit with 36% Market Share

Gold loans have become the largest segment in India's retail credit market, holding a 36% share of loan volumes. This surge is fueled by rising gold prices, which allow consumers to unlock value from their holdings, leading to larger average loan sizes. The market is expanding geographically beyond its traditional southern base into states like Uttar Pradesh and Rajasthan. Furthermore, the borrower profile is diversifying, with over half of loans now taken by prime-credit customers, signaling mainstream acceptance.

Key Points: Gold Loans Lead India's Retail Credit Market: Report

  • Gold loans lead with 36% volume share
  • Average loan size rises to ~₹1.9 lakh
  • Growth expands to North & West India
  • Prime borrowers now over half of base
  • Non-metro regions drive 54% of borrowers
2 min read

Gold loans top retail credit market in India, account for 36 pc volume: Report

Gold loans account for 36% of India's retail credit volume, driven by rising gold prices and expanding beyond southern states, says TransUnion CIBIL report.

"Gold prices have encouraged consumers to unlock value from their holdings - TransUnion CIBIL Report"

New Delhi, March 31

Gold loans have emerged as the leading segment in India's retail credit market, accounting for loan volumes at 36 per cent and around 40 per cent by value, driven by rising gold prices and increasing consumer preference for secured borrowing, a report said on Tuesday.

The report by TransUnion CIBIL showed that the surge has been supported by a sharp increase in ticket sizes, with the average gold loan amount rising significantly over the past two years to around Rs 1.9 lakh in the December 2025 quarter.

The report also noted that the consumer market indicator (CMI) -- a major gauge of credit market health -- rose to 102 in the December 2025 quarter, up from 97 a year ago and 100 in the preceding September quarter which is the third consecutive quarter of improvement.

It further highlighted that gold prices have encouraged consumers to unlock value from their holdings, leading to a strong rise in both loan demand and disbursements.

Notably, gold loans are witnessing expansion beyond their traditional stronghold in southern India, with faster growth now seen in northern and western states such as Uttar Pradesh, Madhya Pradesh and Rajasthan.

The segment is also attracting a more diverse borrower base, with over half of the loans being availed by prime and above-category customers, indicating growing acceptance of gold loans as a mainstream credit product.

The report noted that while credit supply eased following festive demand and GST-related momentum, the moderation reflects seasonal trends rather than a structural slowdown.

Demand for credit remained strong, particularly in semi-urban and rural areas, with non-metro regions accounting for 54 per cent of the total borrower base, up three percentage points year-on-year. The share of new-to-credit consumers also increased to 15 per cent.

Meanwhile, auto loans saw stable volumes during the post-festive period, supported by demand in the affordable mid-segment category, while supply in the segment rose on a daily average basis compared to the previous year.

- IANS

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Reader Comments

P
Priyanka N
This is a worrying trend if you ask me. It shows how many households are under financial stress and are forced to pledge their family gold. While it's good that credit is accessible, the underlying economic pressure is concerning. Hope this doesn't lead to a debt trap for many.
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Aman W
Interesting to see it spreading to UP and MP. In our village in Rajasthan, the local gold loan company has become busier than the bank! People trust it more because the process is quick and they don't ask too many questions. It's a lifeline for small farmers and shopkeepers.
S
Sarah B
As someone who recently moved to India, the cultural significance of gold here is fascinating. It's not just an ornament but a financial asset that can be leveraged in times of need. This report quantifies what seems to be a very practical approach to finance.
K
Karthik V
The average loan of ₹1.9 lakh is significant. It shows people aren't just taking small amounts. They're funding education, medical expenses, or even home renovations. Gold has always been our backup plan, and now it's officially the top credit product. Jai Ho!
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Nisha Z
While the growth is impressive, I hope the regulations are tight. We've all heard stories of unfair practices by some private lenders. Banks and NBFCs need to ensure complete transparency on interest rates and repayment terms to protect borrowers, especially in rural areas.

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