A report from Motilal Oswal details the growth of the gold loan sector in India.
The Indian gold lending market is poised for robust expansion, with a new report from Motilal Oswal projecting a compound annual growth rate (CAGR) of approximately 28 percent for the period spanning FY26 to FY28. This growth trajectory underscores the sector’s increasing significance within the country’s financial landscape.
According to the report, the gold loan segment has evolved into the second-largest consumer lending category for both banks and non-banking financial companies (NBFCs), trailing only home loans. The industry has effectively surpassed personal loans in volume, signaling a shift in retail credit preferences.
Institutional analysts attribute this momentum to two primary drivers: the ongoing formalization of credit markets and the relatively low monetization rate of household gold holdings in India. For private equity and institutional investors, this trend highlights a deepening penetration of financial services into asset-backed lending, offering a stable growth avenue within the consumer credit space.
As formal financial institutions continue to capture market share from the informal sector, the structural shift in gold-backed credit is expected to remain a key area of focus for capital allocation among major Indian lenders and specialized NBFCs.
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