Gold loans have emerged as a strategic driver of financial inclusion, outpacing all other credit products and recording 84% growth year-on-year in FY26, according to an Experian report. It has expanded beyond traditional southern markets to Uttar Pradesh, West Bengal, Rajasthan and , it added. The report further said that portfolio quality has also strengthened, with improvement in net delinquencies.
The report, titled ‘Gold Loans in Transition: Market Evolution & Consumer Patterns’ notes that the product is rapidly evolving into a mainstream option for customers to “unlock the value of household ”.
Manish Jain, Country MD of Experian India in a statement said the rapid growth of gold loans is enabling households to convert a traditionally held asset into a source of accessible . “This is supporting greater financial inclusion while enabling consumers to meet a wide range of personal and livelihood needs. We are seeing clear evidence that gold loans are becoming an increasingly important gateway to formal credit for a wider spectrum of consumers,” he stated.
Strong structural shift in retail credit landscape
- The report highlighted that India’s retail credit space has seen a “strong structural shift” with now being viewed as a reliable and accessible financing option by customers.
- “This trend is benefiting both borrowers and lenders. Gold loan sourcing value accelerated significantly over the last two years, with value growth increasing from 69% in FY25 to 84% in FY26, indicating stronger customer demand and deeper market penetration,” according to the report.
- It added that industry has also expanded substantially from ₹6.3 lakh crore in March 2023 to ₹19.4 lakh crore by March 2026, which reflects sustained momentum.
- In terms of ticket size, the report said that gold loan growth “is being increasingly driven by larger ticket sizes, stronger borrower demand, broader geographic adoption, and growing participation across banks, NBFCs and specialised gold lenders”.
- It added that portfolio quality has remained resilient. Net 90+ delinquency improved from 0.4% in March 2023 to 0.2% in March 2026, indicating that expansion has not hurt stable performance and prudent risk management practices continue.
- “Experian’s analysis of borrower and lender trends indicates that gold loans are now emerging as an important component of formal credit expansion and financial inclusion, moving beyond their traditional role as an emergency credit instrument,” it stated.
What are factors influencing growth in gold loans?
1. The report identified rising gold prices as a key factor for growth in gold loans, as borrowers seem to view increased as a means to unlock larger loan amounts against the same underlying asset.
During the period studied, while the gold price index increased by 144%, gold loan sanction amounts grew by more than 200%, demonstrating how higher asset values are expanding access to . This trend is also reflected in borrowing patterns, with average ticket sizes nearly doubling from ₹0.98 lakh in FY23 to ₹1.96 lakh in FY26, indicating a clear shift towards larger-value loans.
2. Expansion of markets is another factor, as per the report. It noted that gold loans are now becoming increasingly broad-based across the country. And while Southern India continues to remain important, there is strong momentum across newer geographies.
- Strong YoY sourcing growth in FY26 was seen in states such as Uttar Pradesh (+138%), (+112%), Rajasthan (+105%), and Maharashtra (+102%).
- The growth across markets highlights “growing acceptance of gold-backed lending beyond its traditional regional concentration and indicating a broader pan-India expansion trend,” it added.
3. Another significant factor, as per the report is Gold Loans (PSGL), which it felt drive inclusive growth and account for nearly 23% of total gold loan sourcing value in FY26.
“The segment continues to support formal credit access across rural, semi-urban, agricultural and underserved borrower communities. By unlocking the value of household gold, PSGLs are helping convert dormant assets into productive capital, especially supporting women-led , micro-enterprises, livelihood generation and greater participation in the formal financial ecosystem,” the report stated.
Consumer behaviour is evolving: Experian report
It further noted that consumers’ borrowing behaviour is evolving where those who took gold loans also engaged with multiple . It added that the share of such customers has jumped from 10% in December 2021 to 17% in December 2025, indicating stronger borrower confidence and deepening customer relationships.
There is also growing customer stickiness within the segment. In Q4 FY26, about 75% of sourced gold loan customers were repeat borrowers, which shows that gold loans are considered a recurring credit instrument rather than a one-time solution.
It added that borrowing patterns are changing, with shorter loan tenures and stronger repeat behaviour indicating that gold loans are increasingly being used for meeting immediate liquidity requirements and recurring funding needs. “As participation in the segment continues to expand, the future of gold lending will depend on balancing growth opportunities with sustainable lending practices and responsible risk management,” as per the report.