Aum of Gold Loan NBFCs To Cross Rs 4 Lakh Crore by FY27

Mumbai: Assets under management (AUM) of non-banking financial companies (NBFCs) specialising in gold loans is set to log a compound annual growth rate (CAGR) of 40 per cent between this fiscal and next, surpassing Rs 4 lakh crore by March 2027, according to a Crisil Ratings report.

The surge in the AUM of NBFCs will be driven by elevated gold prices, a shift towards secured credit and an evolved regulatory environment, outpacing the CAGR of 27 per cent clocked between fiscals 2023 and 2025.

“Gold prices soared 68 per cent in the first nine months of this fiscal to an all-time high. This enhances collateral values, enabling lenders to scale up disbursements.”

Furthermore, amid limited availability of credit from segments such as unsecured lending, borrowers are looking out for other sources of funding. To capitalise on these lending opportunities, gold-loan NBFCs (both large and mid-size ones) have been expanding their market presence, despite stiff competition from banks.

Says Aparna Kirubakaran, Director, Crisil Ratings, “Large gold-loan NBFCs, having an established brand image, are scaling up their portfolio across existing branches. Meanwhile, their mid-sized counterparts are adopting a dual strategy of expanding their branch network as well as operating as originating partners for large NBFCs and banks. These efforts, combined with strong demand amid elevated gold prices, have boosted business per branch for gold-loan focused NBFCs by around 40 per cent over the last two fiscals."

"Their average AUM per branch stood at Rs 14 crore in the first six months of this fiscal compared to Rs 10 crore in fiscal 2024”.

On the regulatory front, streamlining of loan-to-value (LTV) norms for lower-ticket size gold loans, applicable from April 1, 2026, is expected to provide additional headroom to NBFCs for lending.