The need for gold loans has risen in Kerala since the Onam festival, as the state also sees an explosion of Covid-19 cases.
The need and demand for gold loans is rising strongly in other southern states of India, which also reported high Covid-19 cases. While senior executives in gold loan companies cite health-related costs and demands between job losses and businesses in the midst of the epidemic can be the possible reasons, the region is also seeing a high trend in buying new gold.
The southern part of the country accounts for 40% of the country’s annual gold consumption.
The Jewelers said the purchase of jewelry in Kerala was very strong despite rising Covid charges, as locals in the southern region considered gold to be one of the safest investment tools.
In 2019, India consumed 690 tons of gold. Kerala alone consumes about 70 tons of gold, about 10% of the country’s annual consumption.
Malabar Gold & Diamonds chairman Ahammed MP told ET: “Kerala’s demand for gold jewelry has not been affected and remains the same as last year. In this era of epidemics where charges are increasing day by day, our precautionary measures offered in our stores give hope to our customers and that confidence is already evident in our selling gold jewelry. ”
At the same time, NBFC’s gold loan saw the rise in demand for gold loans on Onam.
UVP Nandakumar, managing director of Manappuram Finance, said: “The recruitment rate for new customers has skyrocketed in Kerala after Onam, but similar trends are evident in other southern provinces. In fact, in September, the growth of gold loans in some southern states was higher than in Kerala. Manappuram Finance are also seeing a positive trend in demand from rural and small towns in the northern and western provinces.
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