Gold-loan NBFCs' AUM to cross ₹4 trillion by FY27: Crisil report

Assets under management of non-banking financial companies specialising in gold loans are set to log a compound annual growth rate (CAGR) of about 40 per cent between this fiscal and next, surpassing Rs 4 lakh crore by March 2027, a report said.

The surge 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, said the report by Crisil Ratings.

Gold prices soared about 68 per cent in the first nine months of this fiscal year to an all-time high.

 

"This enhances collateral values, enabling lenders to scale up disbursements," it said.

Furthermore, amid the limited availability of credit from segments such as unsecured lending, borrowers are looking 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, Crisil Ratings said.

Aparna Kirubakaran, Director, Crisil Ratings, said that 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," Kirubakaran said.

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, the rating agency said.

It also emphasised that gold-loan NBFCs will need to maintain strict control on risk management and operational procedures, including purity assessment, weightage measurement and authenticity evaluation of the pledged gold.

Additionally, periodic internal audits at the branch level will be essential to prevent surprises at the auction stage, Crisil Ratings said.