Gold Loans Jump From 18% to 41% of India's Retail Credit Mix as NBFCs Outrun Banks

The Quick Take

• Gold loans' share in India's retail loan portfolio more than doubled from 18% in FY23 to 41% in FY26, per Experian data
• Non-bank financial companies (NBFCs) are outpacing banks in capturing gold loan market share growth
• Credit bureau Experian report identifies gold loans as a major driver of India's retail credit expansion

Experian's credit bureau data reveals that gold loans have transformed India's retail lending landscape in just three years, with their share in the retail loan portfolio surging from 18% in FY23 to 41% in FY26. This dramatic shift reflects Indian households' preference for gold-backed credit during a period of elevated inflation, rising living costs, and constrained unsecured credit availability. Gold loans carry lower risk-weighted assets and faster disbursement times compared to personal loans, making them attractive to both borrowers and lenders navigating a credit cycle that has tightened around unsecured consumer finance.

NBFC outperformance in gold loan market share is structurally significant: companies such as Muthoot Finance, Manappuram Finance, and Bajaj Finance operate with more flexible gold-loan processes and competitive interest rates compared to regulated scheduled commercial banks. As NBFCs capture incremental share, they gain sticky customer relationships and cross-sell opportunities for other loan products. For the banking sector, the rise of gold loans signals that borrowers are collateralizing existing assets rather than taking unsecured credit—a caution signal for personal loan books and credit card growth rates at larger private sector banks.

Watch RBI guidance on gold loan LTV ratios and NBFC regulatory tightening, as the rapid gold loan growth has prompted closer scrutiny from regulators concerned about asset concentration risk. Gold price direction is the primary macro variable: a gold price correction reduces the collateral cushion underpinning these loans, potentially triggering delinquencies in lower-income borrower segments. The next Experian quarterly report and earnings from Muthoot Finance and Manappuram Finance will confirm whether the market share gains are stabilizing or continuing to accelerate heading into the second half of FY26.

Synthesized from 1 source.