The gold loan market has seen a rise in non-performing assets this fiscal even as the ratio eased over a three-year time horizon, according to a TransUnion Cibil study. The size of the market meanwhile expanded nearly three times in as many years to ₹22.5 lakh crore at the end of August, making the gold loan the second largest pie in the personal loan segment, the report showed.The outstanding volume was ₹7.5 lakh crore as of August 31, 2023. The NPA rose to 0.3% at the end of August from 0.16% seen as of March 31, 2026. The ratio was 0.78% as of end-August 2023.
“One of the reasons behind the rise in NPA could be the high propensity of repeat borrowing with 27% of borrowers having four or more gold loans,” managing director Bhavesh Jain told ET.
“It’s too early to say whether the change in lending regulation is having any impact on delinquency. We have to wait at least a year to arrive at any such conclusion,” he added. The market counted 5.5 crore active borrowers as of August, accounting for 21% of India’s credit-active consumers. One out of five borrowers are from Gen-Z, the report showed.
The report observed that gold loan borrowers have a markedly higher propensity for repeat borrowing compared with borrowers in other liquidity-oriented credit segments. “One in two gold loan borrowers originated another gold loan within 12 months,” the report mentioned.
Incidentally, among borrowers with comparable high-risk and product segments, gold loan borrowers had the highest share of consumers with existing delinquency at time of originations, the credit information company said.
