Gold Loan Market in India 2020

Report Id

168805

Publisher Name

Netscribes (Research on Global Markets)

Published Date

5/1/2020

No of Pages

86

Market Scenario

In India, gold is considered to be a sign of social status, financial security and cultural legacy. As of 2019, households in India assembled about 25,000 tons of gold, making the country the largest holder of the yellow metal in the world. Rural communities account for ~65% of the total gold demand in the country. Owing to the sentimental value that Indians associate with this indispensable item, people seldom sell it to meet financial emergencies. They prefer to pledge gold as collateral to secure short-term loans. Gold loans enjoy a relatively low interest rate that varies between 9.5% and 24%, and have a flexible tenure (ranging from a few days to 5 years). The gold loan market in India was valued at ~INR 2,921.42 Bn in 2019 and is expected to reach ~INR 6,275.40 Bn by 2025, expanding at a compound annual growth rate (CAGR) of ~12.75% during the 2020-2025 period. Segment insights: The Indian gold loan market is segmented into organized gold loan market, also known as formal gold loan market and unorganized gold loan market or the informal gold loan market. The organized gold loan segment includes public banks, private banks, small finance banks, co-operative banks, NBFCs and Nidhi companies. In contrast, the unorganized sector is dominated by money lenders and pawnbrokers. The unorganized segment accounts for more than 60% of the gold loan market in the country. Nevertheless, the organized sector is anticipated to expand exponentially during the forecast period. NBFCs constitute the largest share of the organized market. Customers residing in rural parts of the country are gradually switching to these NBFCs, owing to quick loan processing, systematic gold valuation, auctioning and safe-keeping. Banks also offer gold loans, but they primarily consider these as their priority sector lending (PSL) requirements. Further, small finance and Nidhi companies represent the co-operative segment in the Indian gold loan industry, and account for ~12.98% of the organized gold loan market. Private sector banks are gradually entering the Indian gold loan market with tech-driven offerings like online gold loan services. Impact of COVID-19: The Indian gold loan market has witnessed a positive impact on business during the nationwide lockdown due to the Coronavirus pandemic. Gold loan products have experienced rapid growth than other retail banking products during this period. Due to economic distress and job losses, gold is acting as an insurance policy, as well as a retirement plan across India. People are availing gold loans to fulfill their immediate fund requirements. Moreover, demand for gold loan is further expected to expand as risk profiles of borrowers have depreciated considerably and lenders are becoming risk-averse. Many NBFCs are facing liquidity crisis, which is deteriorating their liquidity capacity. Therefore, gold loans are becoming a fallback plan for borrowers who are denied loan through regular channels. Companies covered: • Axis Bank of India • Central Bank of India • Federal Bank Limited • HDFC Bank Limited • ICICI Limited • Kotak Mahindra Bank Limited • Manappuram Finance Limited • Muthoot Finance Limited • State Bank of India • Union Bank of India

Table of Contents

Chapter 1: Executive summary Chapter 2: Socio-economic indicators Chapter 3: Introduction 3.1. Market definition and structure 3.2. India gold loan industry evolution 3.3. Gold loan value proposition Chapter 4: Market overview 4.1. Demand for gold in India 4.1.1. India’s share in global gold demand 4.2. India gold loan market overview 4.2.1. Market size and growth forecast (2018-2025e) 4.3. Operational benchmarking Chapter 5: Market segmentation 5.1. Indian gold loan market share based on category (2019-2025e) 5.2. Organized gold loan market size and growth forecast (2019-2025e) 5.3. Organized gold loan market share based on player type 5.4. Unorganized gold loan market size and growth forecast (2019-2025e) Chapter 6: Consumer analysis 6.1. Consumer analysis Chapter 7: Impact of COVID - 19 7.1. Impact of COVID - 19 Chapter 8: Market trends 8.1. Market trends Chapter 9: Market influencers 9.1. Market drivers 9.2. Market challengers Chapter 10: Competitive landscape 10.1. Product benchmarking 10.2. Axis Bank Limited – Company information – Business description – Products/services – Key people – Financial snapshot – Key ratios – Key financial performance indicators – Key business segments – Key geographic segments Note: Similar information covered for all other public companies. Private companies' data given on best effort basis. 10.3. Central Bank of India 10.4. Federal Bank Limited 10.5. HDFC Bank Limited 10.6. ICICI Limited 10.7. Kotak Mahindra Bank Limited 10.8. Manappuram Finance Limited 10.9. Muthoot Finance Limited 10.10. State Bank of India 10.11. Union Bank of India Chapter 11: Online gold loan 11.1. Online gold loan operating model 11.2. Digital gold and centralized storage 11.3. Rupeek Fintech Private Limited Chapter 12: Recent development 12.1. Recent development Chapter 13: Acronyms 13.1. Acronyms Chapter 14: Appendix 14.1. Research methodology 14.2. About Netscribes 14.3. Disclaimer

Methodology

This research report involves complete picture of the market with the help of in-depth secondary and primary research. This research report studies several aspects of the market and analyze vital industry influencers. Extensive secondary research has been conducted using paid as well as open access data sources in order to gather information on the market and parent market. These key findings are then analyzed and validated with the help of in-house data models and primary discussions with key industry participants and experts across the value chain

research-methodology

Research Tools and Models

  • Top-Down Approach and Bottom-Up Approach
  • QFD Modeling for Market Size and Share Calculation
  • Regression, Variable and Impact Analysis
  • Penetration Modeling

Qualitative Research

  • It comprises briefing about market dynamics and business opportunities and strategies.
  • Finally, all the research findings are validated through interviews with in-house industry experts, freelance consultants and key opinion leaders etc.

Quantitative Research

It involves various mathematical tools, models, projection, and sampling techniques. It involves following steps:

  • Identification of market variables and market size derivation
  • Assessment of future prospects, opportunities and market penetration rates by analyzing product commercialization, regional trends etc.
  • Evaluation historical market trends and derivation of present and future year-on-year growth trends

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