The credit landscape in the country is transforming with the profile of borrowers, the loans that they prefer and the lenders catering to them undergoing a shift in recent years. In this chat with businessline, Bhavesh Jain, MD & CEO, TransUnion CIBIL, gives us insights into the evolving trends in various loan products.
What is driving the stellar growth in gold loans and which borrowers are driving it?
The best way to start a conversation is with gold because India and Indians love gold. And now the love for gold is also transforming into gold loans. There are multiple reasons why gold loans are picking up in a big way. The first is the availability of gold in Indian households. Second is the ease of getting a gold loan. And when we look at it from the lender’s lens, it’s a secure product. It is available, at their premises, in case of any challenges with non-payment.In the last 4 to 6 quarters, the gold loan has become the fastest growing retail credit product in the country. Home loans are still the number one in terms of outstanding loans in India and gold loans are at number two. Gold loan AUM has almost reached Rs 20 lakh crore and the credit loss is around 0.3%. It’s not just the millennials going for gold loans. Gen Z, or younger customers, are also going for it. One in five gold loans is taken by younger borrowers.Historically, only the five southern states would go for gold loans, now the western and many northern states are also joining in the gold loan growth story. It’s not just a semi-urban or rural phenomena either. The borrowers are across geographies, including urban locations.Another interesting trend is that 1 in every 5 gold loans is given to a borrower who already has an NPA on other trade lines.
