The gold prices are posting big rise thus several private financing companies in order to increase their lending to add up their profits, have started increasing their business in gold loans. Since some of the big banks’ have taken decision of cutting personal loans there has been boost in gold loans.
As per media reports, finance companies are seeing 80-100% growth in their gold loan business as more and more borrowers are looking at gold jewelry as a collateral for loans.
With commercial banks cutting back personal loans has helped NBFCs who are engaged in disbursement of gold loans. Several NBFCs have specialized in gold loans and have attained strength from hassle-free and speedy disbursement of loans. The gold price in bullish market provides comfort level to the lenders as they find it very convenient as collateral.
The Muthoot Group, which maintains to be the country’s largest lender against gold, have asserted that in the next 2 years the company will be increasing its gold loans portfolio to over Rs 4,000 crore.
Banks are putting foot forward very cautiously as they do not want to take any unwanted risks on defaulters. While some of the companies having specialization in this business are targeting only rural farmers and needy customers.
Manappuram Group sources informed in the last 3-4 months company have witnessed the maximum growth. At present its loan book looks healthy showing over Rs 2,000 crore whereas till September 30 it stood at Rs 1728 crore. If the company continues to make profit, the group will be able to achieve over 80-100 per cent growth in 2-3 years’ time.
Now the commercial banks are showing interest in the gold loan business.
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The business of loan against gold is expanding as it is most preferred deal in India. It is the convenient option to apply for in times of need. The Rates On Gold Loan are lowest and it is the major reason behind its popularity
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