Wallet concentration in gold loans, recent delinquency and high dependence on gold loans within the overall borrower wallet are important forward-risk indicators

The average gold loan balance per account has increased from ₹1.1 lakh in March 2022 to ₹1.9 lakh n December 2025 | Photo Credit: DHIRAJ SINGH th-online Administrator

Gold loans have grown rapidly to become India’s second-largest retail credit product by balance share after housing loans amid rising borrower adoption, higher ticket sizes, and broader lender participation, according to TransUnion CIBIL’s Gold Loan Landscape Report.

Even as gold loans share in India’s retail credit portfolio has risen 3.8 times from 5.9 per cent in March 2022 to 11.1 per cent by December 2025, the report flagged wallet concentration in gold loans, recent delinquency and high dependence on gold loans within the overall borrower wallet as important forward-risk indicators.

Housing loans with 27.8 per cent share by balance as of December 2025 forms the largest retail credit product.

The Credit Information Bureau (CIB) assessed that the average gold loan balance per account increased from ₹1.1 lakh in March 2022 to ₹1.9 lakh n December 2025, underlining the rising scale of borrowing in the segment.

Gold loan origination volumes have grown 2.3x since Q1 2022, while origination value has increased 5.1x over the same period.

The average ticket size has grown from ₹90,000 in Q1 2022 to ₹1.96 lakh in Q4 2025, indicating that the market is not only widening in reach, but also moving toward higher-value borrowing, according to the report.

The report also pointed to changing borrower leverage patterns, with the average outstanding amount per borrower going up from ₹1.9 lakh in December 2022 to ₹3.1 lakh in December 2025.

The number of borrowers with gold loan exposure above ₹2.5 lakh increased to 14 per cent of total borrowers at the end of 2025, up from 10 per cent in 2022.

TransUnion CIBIL said borrowers with higher existing balances and greater unsecured exposure have also become more prominent at origination, indicating that gold loans are increasingly sitting alongside other forms of credit in borrower wallets.

Changing borrower profiles

The CIB underscored that borrower profiles are changing, with the share of prime and above prime borrowers in gold loan originations rising from 43 per cent in 2022 to around 52 per cent in 2025, while new-to-credit participation declined from 12 per cent to 6 per cent.

This suggests that gold loans are becoming more broad-based and diverse in borrower profiles, it added.

CreditVision (CV) score ranges are: Subprime 300–680; near prime 681–730; prime 731–770; prime plus 771–790; super prime 791-900.

Referring to the structural shift in how gold-backed borrowing is being used, Bhavesh Jain, MD and CEO, TransUnion CIBIL, said, “Gold has always held deep financial and cultural relevance in India...Gold loans are increasingly becoming a mainstream, organised and accessible form of secured credit. Their rapid growth reflects both lender confidence and rising consumer acceptance.

“What is particularly notable is that the segment is drawing more borrowers with stronger credit profiles, larger ticket sizes and repeat usage. This is an indication that gold loans are no longer being used only for short-term liquidity needs but are becoming part of broader household borrowing behaviour.”

Women borrowers & states

The CIB noted that women borrowers have emerged as an important growth driver in gold loans’ expansion, accounting for 39 per cent of gold loan originations by volume in 2025, up from 36 per cent in 2022, with strong growth visible not only in the southern markets, but also across the western and northern states.

The report highlighted notable momentum among women borrowers in Telangana, Uttar Pradesh, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh, reflecting the broadening geography of demand.

Gold loans: product of last resort

The report also highlighted the need for sharper borrower-level risk assessment as the segment grows. Based on the study, for gold loans originated in the six months ended June 2025, overall delinquency was 1.1 per cent (delinquency being measured as any trade reported as 60 days past due within six months of origination).

The study assessed that borrowers whose post-origination gold loan outstanding amount exceeded ₹2.5 lakh, showed a delinquency incidence of 1.5 per cent, about 2.2x that of borrowers with lower exposure, at 0.7 per cent.

The report further noted that borrowers with a history of serious delinquency, who subsequently rely on gold loans, face a significantly higher risk of disengagement from the formal credit system. Their credit-access closure rate was around 1.6x higher than that of non-defaulting borrowers, suggesting that for a section of stressed borrowers, gold loans may increasingly be functioning as a product of last resort.

Jain observed that as the gold loan segment expands, lenders’ priority must be to balance growth with prudence. Collateral strength remains important, but it cannot be the sole criterion for evaluating borrowers.

“Lenders will need to assess total borrower indebtedness, repayment capacity, recent credit behaviour and cross-lender exposure more holistically. Stronger borrower-level loan-to-value checks, risk-based pricing, and closer monitoring of repeat reliance on gold loans will be essential to ensure that this important segment continues to grow in a sustainable and responsible way,” he said.

Published on April 14, 2026