Gold Loan NBFCs - Unbreakable Niche: Nirmal Bang

Gold jewelry sits on a digital scale during the processing of a customer's  gold loan application at their home in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Gold Loan NBFCs - Unbreakable Niche: Nirmal Bang

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Nirmal Bang Report

Gold loan non-banking financial companies are operating in a niche segment which is unlikely to be targeted by banks.

We base this conclusion on our recent interaction with a gold loan-focused fintech.

Despite the banks’ high inclination towards the product because of its perceived risk-free nature and high profitability, the challenges related to distribution and overall execution are major supply-side deterrents.

For perspective, consider that Muthoot Finance Ltd.’s branch count is 84% of HDFC Bank Ltd. while its loan book is less than 9% of HDFC Bank’s retail book.

From a demand standpoint, pricing is one of the factors but not a decisive one alone.

Click on the attachment to read the full report:

Nirmal Bang Gold loans NBFCs - Sector Update-21 June 2021.pdf


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