Gold loans are rapidly emerging as one of India's fastest-growing retail credit products, with more consumers using their household gold to access formal credit amid rising gold prices, growing liquidity needs and easier access to secured borrowing, according to a new report by Experian India.
The report, titled ‘Gold Loans in Transition: Market Evolution & Consumer Patterns’, highlights a significant shift in borrowing behaviour, showing that gold loans are no longer viewed merely as an emergency funding option. Instead, they are increasingly becoming a mainstream credit product used by households, small businesses and repeat borrowers across the country.
Experian's analysis shows that gold loan sourcing value grew by 84% year-on-year (y-o-y) in FY25-26, sharply higher than the 69% growth recorded in FY24-25, making it one of the fastest-growing segments in India's retail lending market.
The industry's overall gold loan portfolio expanded from ₹6.3 lakh crore in March 2023 to ₹19.4 lakh crore by March 2026, underlining the scale of growth witnessed over the past three years.
Rising Gold Prices Unlock Bigger Loans
One of the biggest factors behind the surge in gold loans is the sharp increase in gold prices.
According to the report, the gold price index rose by 144% during the study period. As the value of pledged gold increased, borrowers were able to access significantly larger loan amounts without pledging additional assets.
Experian found that while gold prices increased by 144%, sanctioned gold loan amounts rose by more than 200%, indicating that higher gold valuations are directly expanding consumers' borrowing capacity.
The trend is also visible in average loan sizes.
The average gold loan ticket size nearly doubled from ₹0.98 lakh in FY22-23 to ₹1.96 lakh in FY25-26, reflecting a growing preference among borrowers to use gold as collateral for larger financing needs.
“Gold Loan sourcing shows a clear migration toward higher ticket sizes across all tiers, with the shift being much stronger on sourcing value than on loan count. On a value basis, the over ₹3 lakh segment has expanded sharply from FY22-23 to FY25-26 across tiers — increasing from 45% to 69% in Tier 1, 35% to 61% in Tier 2, 34% to 63% in Tier 3, and 28% to 55% in Tier 4. This indicates that incremental sourcing value is increasingly being driven by larger-ticket loans, supported by higher collateral value and stronger borrower appetite,” the report said.
Gold Loans Becoming a Preferred Credit Option
The report suggests that consumers are increasingly choosing gold loans because they offer quick access to funds, require minimal documentation and are backed by an asset that many Indian households already possess.
Unlike unsecured personal loans, gold loans allow borrowers to leverage an existing asset to secure financing, often resulting in faster approvals and lower risk for lenders.
This has made gold loans attractive for meeting both personal and business-related funding requirements.
Experian noted that gold loans are increasingly supporting a wide range of needs, including household expenses, working capital requirements, agricultural activities, livelihood generation and short-term liquidity demands.
Repeat Borrowers Driving Growth
Another key finding of the report is the growing reliance on gold loans among existing customers.
Nearly 75% of all gold loans sourced during the fourth quarter of FY25-26 came from repeat borrowers, indicating that consumers are increasingly returning to the product for recurring financing needs.
The report suggests this reflects rising customer confidence and trust in gold-backed lending.
At the same time, gold loan customers are becoming more integrated into the broader financial system. The proportion of gold loan borrowers using multiple credit products increased from 10% in December 2021 to 17% by December 2025, pointing to deeper engagement with formal credit channels.
Growth Expands beyond Southern India
Traditionally, gold lending has been concentrated in southern states where gold ownership levels are relatively high.
However, the latest data indicates that the market is rapidly expanding across the country.
The strongest y-o-y growth in FY25-26 was recorded in Uttar Pradesh, where sourcing grew 138%.
West Bengal followed with growth of 112%, while Rajasthan and Maharashtra recorded increases of 105% and 102%, respectively.
The report says this trend demonstrates that gold-backed borrowing is gaining acceptance well beyond its traditional strongholds and is evolving into a pan-India credit product.
Financial Inclusion Driving Adoption
Experian also highlighted the growing role of priority sector gold loans (PSGLs) in supporting financial inclusion.
The segment accounted for about 23% of total gold loan sourcing value in FY25-26.
These loans are helping rural households, agricultural borrowers, micro-enterprises and underserved communities gain access to formal credit by monetising household gold holdings that would otherwise remain idle.
The report noted that gold loans are particularly important for women-led households and small businesses that may have limited access to conventional forms of credit.
By converting household gold into productive capital, lenders are helping expand financial inclusion while supporting economic activity in rural and semi-urban areas.
Asset Quality Improves despite Rapid Growth
Despite the rapid expansion of the sector, lenders have managed to maintain strong portfolio quality.
Experian found that net 90-plus-day delinquency improved from 0.4% in March 2023 to 0.2% in March 2026.
The improvement indicates that growth in the segment has been accompanied by prudent lending practices and effective risk management.
This is particularly noteworthy, given the sharp rise in loan volumes and customer participation over the period.
Gold Emerging as a Gateway to Formal Credit
Commenting on the findings, Experian India country managing director Manish Jain said the growth of gold loans reflects how consumers are increasingly using existing assets to access formal finance.
He said India's substantial household gold holdings provide a significant opportunity to improve financial inclusion by enabling families to convert a traditionally held asset into an accessible source of credit.
According to Mr Jain, the data shows that gold loans are becoming an important gateway to formal lending for a broader spectrum of consumers, while also contributing to the expansion of India's retail credit market.
The report concludes that as gold prices remain elevated and consumer awareness grows, gold loans are likely to play an increasingly important role in India's credit ecosystem. However, it notes that sustainable growth will depend on maintaining strong governance standards, responsible lending practices and prudent risk management as the market continues to expand.
