Gold-loan NBFCs may cross Rs 4 lakh crore AUM by FY27: Crisil Ratings
Crisil Ratings in its latest report has said that Assets under management (AUM) of non-banking financial companies (NBFCs) specialising in gold loans are expected to grow at a compound annual growth rate (CAGR) of around 40 per cent between the current and next fiscal year, surpassing Rs 4 lakh crore by March 2027. The surge is expected to be driven by high 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 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. Moreover, it stated that 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.
Aparna Kirubakaran, Director, Crisil Ratings, said that large gold-loan NBFCs, having an established brand image, are expanding their portfolios across existing branches. Kirubakaran said ‘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.’
