How some financiers are benefiting from India's shadow banking crisis

Many shadow lenders have been effectively shut out of the nation's credit market as the more than 15-month-old banking crisis raises investor wariness about the financiers' ability to refinance debt

As the shakeout in India’s credit market shows few signs of abating, one group of financiers is benefiting from the turmoil: shadow banks that provide loans in exchange for gold.

In a country deeply attached to the precious metal, whose people stockpile more gold than citizens of any other country, borrowers are increasingly pawning their family jewelry to get cash amid a fundraising crunch.

That’s helped double the share price in the past year of Manappuram Finance Ltd, one such firm, while the stock of Muthoot Finance Ltd, the country’s largest cash-for-gold lender, has jumped 47%. Those financiers’ bonds are