15-18% growth in NBFC gold loans
There might be a huge 15-18% growth in NBFC gold loans. The higher demand for gold loans from large scale enterprises, medium scale enterprises, and small scale enterprises has led to efficient growth, according to Asset Under Management (AUM). At the start of the pandemic, that from March to May, the gold loan demand was next to zero. The overall gold loan market was about to collapse. However, as times moved ahead the gold loan market began to do well, and thus become a pillar to stabilize the economy.
The reasons behind 15-18% growth in NBFC gold loans.
As the employment crunch was felt by every household, people turned to gold loans to meet daily needs or to revive businesses, this is was estimated by the CRISIL (Credit Rating Information Services of India) in one of their reports. However, the gold loan sector hasn’t faced grave issues when it comes to disbursement and re-pledging of it. although this is not the case when it comes to other types of loans.
While NBFCs (Non-Banking Finance Companies) see a rise in demand for gold loans, this rise might not follow up on other loans. It is observed that the NBFC has tightened the rules and regulations that revolve around other types of loans. That being said, there barely is any collection money that suffices the NBFCs other loan structures, like MSME and unsecured loans.
Also, RBI had already announced an increase in the LTV of gold, to 90%. This announcement has also been the driving force amongst the people to turn to a gold loan to any other loan. This will typically help the gold loan market to flourish and shall help the people at large too, Other than that, the NBFCs have seen to it that they practice fresh disbursements, thus increasing the magnitude of the loan takers in general.