The Reserve Bank of India reports that loans against gold jewellery are the fastest-growing segment in the country’s retail credit market, driven by higher gold prices and ease of access, outpacing traditional loans like housing and auto finance.
India’s retail credit mix is shifting towards gold-backed borrowing, with the Reserve Bank of India saying loans against gold jewellery have become the fastest-growing segment in the consumer market. In June, outstanding gold loans from non-banking financial companies climbed 69% year on year to ₹3.42 lakh crore, up from ₹2.02 lakh crore a year earlier, according to the central bank’s latest Financial Stability Report. The appeal is straightforward: borrowers can often unlock funds quickly against an asset they already own, with far less paperwork than many other forms of credit.
The RBI said this expansion outpaced home loans and vehicle finance, even as retail lending as a whole remained strong. Non-banking lenders’ retail credit rose 20.3% in June 2026 from a year earlier, compared with 14.3% in the same month of 2025. The central bank also noted that gold loan growth has been supported by a broader rise in secured borrowing as households look for easier access to formal credit.
Market reports suggest the pace has been building for some time. LiveMint, citing the RBI’s Financial Stability Report, said gold loans have posted a compound annual growth rate of 42.4% since March 2024, nearly double the 23% rise in non-housing retail loans over the same period. Business Standard reported that higher gold prices have helped fuel lending by improving collateral values, while also giving lenders a larger buffer against risk.
The trend is not limited to household finance. The RBI said agricultural lending grew 17.9% in June 2026, up from 5.1% a year earlier, while industrial credit slowed to 6.7% from 10.3%, reflecting weaker infrastructure lending. Services-sector lending by non-banking financial companies also eased to 17.6% from 22.4%, though commercial real estate remained a bright spot. Experian, in a separate report cited by LiveMint and Moneylife, said gold loans are increasingly being used as a mainstream credit product by households, small businesses and repeat borrowers, rather than only as emergency financing.
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