Gold loans have become one of India's fastest-growing retail credit products, with sourcing surging 84 per cent year-on-year in FY26, outpacing all other segments, according to credit information bureau Experian.
Sourcing growth accelerates
The report highlighted a sharp acceleration in growth momentum. Sourcing value rose to 84 per cent in FY26 from 69 per cent in FY25, reflecting robust demand and deeper market penetration. The industry's portfolio has more than tripled, expanding to ₹19.4 lakh crore by March 2026 from ₹6.3 lakh crore in March 2023.
A key driver has been rising gold prices, which enabled borrowers to unlock higher loan amounts. While the gold price index rose 144 per cent during the period, sanction amounts grew over 200 per cent. This pushed average ticket sizes to double to ₹1.96 lakh in FY26 from ₹0.98 lakh in FY23.
Consumer behaviour and repeat borrowing
Consumer behaviour is also evolving, with repeat borrowers accounting for around 75 per cent of new sourcing in Q4 FY26.
“India’s credit growth is increasingly being shaped by how effectively the financial ecosystem is enabling consumers to leverage existing assets to access formal credit,” said Manish Jain, Country Managing Director, Experian India. “The rapid growth of gold loans is helping households convert a traditionally held asset into accessible finance, supporting financial inclusion and meeting diverse funding needs,” he added.
Geographic expansion beyond traditional markets
The study revealed expansion is no longer limited to traditional southern markets. Strong growth was recorded in:
- Uttar Pradesh: +138 per cent
- West Bengal: +112 per cent
- Rajasthan: +105 per cent
- Maharashtra: +102 per cent
Asset quality strengthens
Alongside rapid growth, asset quality has also strengthened. Net 90+ delinquency improved to 0.2% in March 2026 from 0.4% three years earlier, indicating that the surge in lending has not come at the cost of credit risk.
Implications for the financial system
For CFOs and treasury professionals, the gold loan surge represents a structural shift in India's credit landscape. The asset class is emerging as a mainstream credit driver, with a portfolio now exceeding ₹19 lakh crore. Banks and non-bank lenders with strong gold loan exposure may see improved portfolio yields, but also need to manage concentration risk. The improved delinquency rates suggest underlying asset quality is robust, which is positive for investors tracking financial sector balance sheets. As gold prices remain elevated, the momentum in gold loans is likely to persist, influencing overall credit growth and liquidity in the system.
Sources:
