Business News
Gold loan market to grow to over Rs 3 lakh cr, average annual demand will touch 950 tonne by 2020: KPMG
New Delhi: The organised gold loan market in India is expected to grow to over Rs 3 lakh crore by 2020 at a three-year Compound Annual Growth Rate (CAGR) of 13.7 percent, British consulting multinational KPMG said on Tuesday, citing its report based on an industry survey. The reported titled “India’s gold loan market: Is the glitter fading?” cites the World Gold Council which estimated last year that average demand in the country would go up to around 850 to 950 tonnes per annum by 2020, with two-thirds of this demand coming from the rural market.
“Industry projections say the organised gold loan market in India will grow to Rs 3,101 billion by 2020 at a three-year CAGR of 13.7 percent,” a KPMG release said.
According to KPMG, gold loan companies are expected “to continue delinking the gold price volatility risk by offering more variants of lower tenure loan products”. Noting that increased competition from small finance banks are having a yield reducing impact, the report said the gold loan space is likely to see “interesting partnerships with fintechs (financial technology companies) to help streamline and automate processes”. The report has identified factors such as exclusion from mainstream personal and retail loans by commercial banks, and changing attitudes to applying for gold loans, as the growth drivers of the gold loan market in India.