A growing number of business owners and households see gold loans as a source of long-term investment, which was unusual in the past as such large sums were closed within a year, gold loan companies said.
Kerala-based non-bank finance company Indel Money has launched a gold loan product that has been in operation for two years.
Chief Executive Officer Umesh Mohanan said: “The response so far has been very encouraging. The demand for gold loans is also exacerbated by the current debt. Therefore, there are enough long-term loan requirements emerging, which can be met with a gold loan. ”
This trend is expected to continue and help the loan market for gold loans grow to $ 62.8 billion, or about Rs 4,61,700 crore, in 2021-22 from $ 47 billion in 2019-20, according to a report released by the World Gold Council.
After the closure, Indel has been exploring various ways to raise funds to continue lending money and addressing the demand for gold loans, Mohanan said. “We were the first to enter into a passthrough agreement (PTC) immediately after the closure. We also created PTC transactions for the first revolving gold loan to expand our gold loan. We are also looking at opportunities for corporate lending and banking, ”said Mohanan.
The trend is expected to continue and help the loan market for gold loans grow to $ 62.8 billion, or about Rs 4,61,700 crore, in 2021-22 from $ 47 billion in 2019-20, according to a report released by the World Gold Council.
After the closure, Indel has been exploring various ways to raise funds to continue lending money and addressing the demand for gold loans, Mohanan said. “We were the first to enter into a passthrough agreement (PTC) immediately after the closure. We also created PTC transactions for the first revolving gold loan to expand our gold loan. We are also looking at opportunities for corporate lending and banking, ”said Mohanan.
Managing Director of Manappuram gold loan VP Nandakumar said: “After the temporary closure, we have seen an increase in the amount of gold borrowed due to the lack of access to alternative credit options given the increased risk of competition between banks and other NBFCs. But more recently, we are seeing an increase in demand for gold loans in line with the return to economic activity, especially in rural and urban areas. In fact, we have been able to achieve our full year growth strategy for the year that ended in September itself. As GDP growth is likely to increase, we should look at positive growth and business growth going forward. ”
Manapuram’s existing gold borrowed products offer full flexibility to the customer to extend the term of the permanent gold loan. No limit is there for the number of times a loan can be extended – but interest has to be paid in full at the time of the transfer.
As the transfer takes place on the loan available for disclosure, any deficit due to the marketing sign will be properly performed by the customer. On the other hand, if the price of gold goes up, the customer will be eligible for a higher loan, Nandakumar said.
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