NEW DELHI, India — Gold-backed lending in India has expanded rapidly over the past three years, with total balances growing fourfold and the average loan size nearly doubling to about Rs 2 lakh, reflecting rising borrower demand and broader acceptance of gold as collateral, according to a new report released Tuesday.
Data from TransUnion CIBIL shows that gold loans have significantly increased their share in India’s retail credit market, climbing from 5.9 percent in March 2022 to around 11 percent by December 2025. This makes gold loans the second-largest retail credit product by balance share.
The growth has been driven by a combination of factors, including increased borrower adoption, higher loan amounts, greater participation by lenders, and a shift in borrower demographics. More consumers, including women and individuals with stronger credit profiles, are entering the segment.
Non-banking financial companies, or NBFCs, have played a growing role, with their share of gold loan balances rising from 7 percent in March 2022 to 11 percent in December 2025. Public sector banks also strengthened their dominance, increasing their share from 57 percent to 62 percent over the same period.
The average gold loan balance per account rose from Rs 1.1 lakh in March 2022 to Rs 1.9 lakh by December 2025. Loan originations surged as well, with volumes increasing 2.3 times since early 2022, while the total value of those loans jumped roughly fivefold. The average ticket size grew from Rs 90,000 in the first quarter of 2022 to Rs 1.96 lakh by the final quarter of 2025.
Borrower profiles have evolved alongside this growth. The share of prime and above-prime borrowers increased from 43 percent in 2022 to about 52 percent in 2025, while the proportion of new-to-credit customers declined from 12 percent to 6 percent, signaling a more mature and diversified borrower base.
Women have emerged as a key driver of demand, accounting for 39 percent of gold loan originations in 2025, up from 36 percent in 2022. Growth has been strong not only in traditional southern markets but also in states such as Uttar Pradesh, Rajasthan, Gujarat, Maharashtra, and Madhya Pradesh.
At the same time, borrower leverage has increased, with the average outstanding amount per borrower rising from Rs 1.9 lakh in December 2022 to Rs 3.1 lakh by December 2025. The share of borrowers with exposure above Rs 2.5 lakh also grew, reaching 14 percent compared with 10 percent three years earlier.
TransUnion CIBIL Managing Director and CEO Bhavesh Jain said gold continues to hold deep financial and cultural significance in India, but the way it is being used is evolving.
“Gold loans are increasingly becoming a mainstream, organised and accessible form of secured credit. Their rapid growth reflects both lender confidence and rising consumer acceptance,” he said.
Despite the strong expansion, the report flagged emerging risks related to asset quality. For loans originated in the six months ending June 2025, overall delinquency stood at 1.1 percent. Borrowers with exposure above Rs 2.5 lakh showed higher delinquency rates of 1.5 percent, more than double the 0.7 percent recorded among those with lower exposure. (Source: IANS)
