New Delhi, March 31: Gold loans have emerged as the largest segment in India’s retail credit market. According to a report released on Tuesday, gold loans account for 36% of the total loan volume and nearly 40% in terms of value. The primary drivers behind this trend are rising gold prices and an increasing preference for secured loans among consumers.
The TransUnion CIBIL report indicates a significant increase in the average gold loan amount over the past two years. In the December 2025 quarter, the average gold loan reached approximately ₹1.9 lakh, reflecting rapid growth in this segment.
The report also highlighted that the Consumer Market Indicator (CMI), which reflects the state of the credit market, rose to 102 in the December 2025 quarter, up from 97 a year earlier and 100 in the September quarter. This marks an improvement for the third consecutive quarter.
High gold prices have encouraged individuals to leverage their gold assets for loans, resulting in a sharp increase in both demand and distribution of gold loans.
Previously dominated by South India, the gold loan market is now experiencing rapid growth in northern and western states such as Uttar Pradesh, Madhya Pradesh, and Rajasthan.
A diverse range of customers is now engaging in this segment. According to the report, more than half of the loans are being taken by prime and above-category customers, indicating that gold loans are becoming a mainstream credit option.
The report also noted a slight easing in credit supply following the festive season and the impact of GST, but this is attributed to seasonal factors rather than a sign of permanent decline.
Demand for credit remains robust, particularly in semi-urban and rural areas. The share of non-metro borrowers has increased to 54%, up 3% from last year, while first-time loan seekers now represent 15% of the market.
Meanwhile, the auto loan segment remains stable, driven by steady demand for mid-segment vehicles, with an increase in supply compared to the previous year.
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