Gold loan market thriving in Indian states; Unimoni eyes Rs 1,000 crore loan book by FY25
gold loan market for raising funds, said CA Krishnan R, director & CEO of Unimoni Financial Services.
«Though our major customers are farmers who avail loans during harvest season and close the loan when the harvesting season is over. We also have customers from retail traders, salaried middle class, self-employed and micro enterprises. Individual consumers are increasingly opting for gold loans to meet their needs, i.e. education, weddings, and medical expenses. Small businesses too have been showing increased interest in gold loans, as a secure means of raising working capital,» Krishnan said.
He said that the upward trend in gold prices is also makes lenders’ portfolios safer because they can keep good loan-to-value ratios. Also, there has always been an affection for owning gold as part of our culture and coupled with increasing accessibility to gold loan services, sustains demand across diverse demographic segments. Additionally, going digital streamlines loan processes making them convenient besides reducing lenders’ operational costs while at it. All these reasons make India have a very strong gold loan market.
Rising gold price is definitely adding a momentum in gold loan business. Most of our customers want to unlock the maximum potential of their gold while they apply for a gold loan. Rising gold prices also allow existing gold loan borrowers to seek a top-up of the existing loans.
For lenders, their gold loan portfolio becomes more secure when the gold price goes up. They can maintain a better LTV
