Gold loan non-banking finance company Indel Money expects 50 per cent growth in business in current financial year


Gold loan non-banking finance company (NBFC) Indel Money is expecting a 50 per cent growth in its gold loan business in the current financial year. The NBFC feels that the demand for gold loan in FY22 will be fuelled by healthcare requirements, pandemic-driven uncertainty, the limitations of the banking sector to serve gold loan demand at the earlier pace due to decreased gold prices and the end of 90% LTV (loan-to- value) lending on March 2021, apart from increased credit crunch due to prevailing policies.

Talking to ET, Umesh Mohanan, executive director, Indel Money said “Our gold loan book has registered around 40% growth in FY20-21. We expect around 50% plus growth in FY 21-22 thanks to our expanded geographical presence. We have recently expanded our presence by opening 25 branches across Andhra Pradesh and Telangana. We have focused ourselves on expanding to Maharashtra and Gujarat by Q4 of FY22 and we have eyes of expansion over Odisha and West Bengal too, which we are trying to expand within Q1 of next financial year.”

There is a growing demand for long-term institutional liquidity for NBFCs at fair interest rates which is the current trend in the NBFC space as there is envisaged default rates rise which will lead to eventualities and in order to cushion this, the demand for long-institutional liquidity is on the rise. But in sharp contrast to the above situation, I believe the gold loan NBFCs are not in such a dire strait as a major chunk of their defaults shall be self healed as the worst case scenario shall be supported by liquidating/auctioning the underlying gold security for the particular assets, he added.

“We are also planning to set up a support hub in all major cities to spread our doorstep gold loan facility which functions on the network of virtual branches. We are planning to launch pre-paid cards as well. Our disbursals are allowed to be fully automated because of our tie-ups with banks through API. Existing customers can use our portal or mobile app to extend the exposure of the gold pledged with us on the basis of the prevailing LTV. We’ll set up an automated process in which customers can manage the credit line according to her/his preferences. We are also planning to expand our online gold loan facility to take the branches to homes as the upper segments of MSMEs are not comfortable to visit gold loan company branches during the gold appraisal process,” Mohanan said.


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