India’s gold loan market nearly triples to ₹22.5 lakh crore in three years

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However, the latest quarter (Q1FY27) shows signs of moderation, with lower disbursement activity and little growth in unique borrowers

By BL Mumbai Bureau

Updated - November 05, 2026 at 06:23 PM.

India’s gold loan market has expanded rapidly, with outstanding balances reaching ₹22.5 lakh crore as of August 2026, according to TransUnion CIBIL.

India’s gold loan market nearly triples in three years; outstanding balances reach ₹22.5 lakh crore

India’s gold loan market expanded nearly three times in the last three years, with outstanding balances reaching ₹22.5 lakh crore as of August 2026 and origination values growing faster than loan volumes, according to a TransUnion CIBIL report.

lower disbursement

However, the latest quarter (Q1FY27) shows signs of moderation, with lower disbursement activity and little growth in unique borrowers. This suggests recent expansion is driven more by larger loan amounts and repeat borrowing than by adding new borrowers.

The number of active borrowers rose to 5.5 crore (21 per cent of India’s credit-active consumers), with an average balance of ₹4.1 lakh (₹2.1 lakh three years ago) per borrower, as growth shifted to higher ticket-sized loans, per the report “Lending Unlocked: Gold Loans”.

The report found that gold loan sanctions rose 12 per cent year-over-year (yoy) to ₹8.2 lakh crore during the three months ended June 2026, despite a 15 per cent yoy decline in origination volumes.

Approximately 3.7 crore gold loans were disbursed during this period, while the number of unique borrowers originating a gold loan held broadly stable yoy at 2.4 crore.

The Credit Information Company (CIC) emphasised that this indicates that the decline in origination volumes was not driven by lower borrower participation but rather coincided with a shift towards larger-ticket loans. Loan originations of value greater than ₹2.5 lakh grew 19 per cent yoy by volume, reflecting a shift towards higher-ticket-size loans.

Women, Gen Z and repeat borrowers drive demand

Further, women (2 in 5 gold loan borrowers), Gen Z (21 per cent of gold loan originations), and repeat borrowers (2 in 3 had an existing gold loan) are important segments for gold loan origination.

“Two-thirds of originations during Q2 2026 came from semi-urban and rural markets, and…the share of borrowers with a CIBIL Score above 800 reached 40 per cent, up four percentage points since the quarter ending June 2023.

“While southern states remain the foundation of India’s gold loan market, with 68 per cent share (down from 73 per cent in 2023) in gold loan borrowers, recent growth has increasingly come from other regions, signalling broader acceptance of gold-backed credit beyond its traditional strongholds,” the report said.

Lenders urged to assess borrowers beyond pledged gold

Bhavesh Jain, MD and CEO, TransUnion CIBIL, observed that as consumers access gold-backed credit at different stages of their financial journeys, lenders need to look beyond the value of the pledged collateral to understand their overall borrowing requirements.

“Repeat borrowing, changes in credit exposure and repayment behaviour across different products are important considerations when assessing a customer’s financial position. A robust view of credit history, existing obligations and repayment capacity can help lenders identify suitable financing opportunities, strengthen customer relationships and manage portfolio risk responsibly,” he said.

The CIC said repeatED borrowing creates a significant relationship opportunity for lenders. Among the borrowers studied, one in two gold loan borrowers originated another gold loan within 12 months, giving these loans the highest repeat-borrowing rate among the liquidity-orientated products studied. This creates an opportunity for lenders to deepen relationships with good customers.

Potential early risk indicators

The report noted that gold loan borrowers’ performance has improved over the last several quarters, with the proportion of active gold loan borrowers with gold loan accounts 30 or more days past due declining from 2.0 per cent in June 2025 to 1.4 per cent in June 2026. Over the same period, the number of active gold loan borrowers increased from 4.8 crore to 5.4 crore.

An analysis of a sub-segment of five crore active gold loan borrowers in December 2025 with a CIBIL Score above 730, at least two years of credit history and no existing credit obligations that were 30 or more days past due as of December 2025, found that 7 per cent experienced delinquency across their credit obligations between January and June 2026.

The CIC cautioned that certain borrower segments were more likely to be delinquent in the next six months. It assessed that consumers who had missed more than one payment in the preceding six months were three times more likely to experience delinquency in the next six months.

The corresponding multiples were two times among consumers holding business-orientated loans alongside gold loans and 1.4 times among those with non-mortgage outstanding balances of ₹5 lakh or more.

Published on November 5, 2026

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