Gold loan expected to see boost in organized segment
By Vaibhav Aggarwal
Mar 18, 2011
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Loan against gold has gradually been seen to increase its presence in the organized loan segment. By the end of this fiscal, it is estimated to experience a double increase in gold loans in especially three companies focussing mainly on this segment of loans.

The major non banking finance companies (NBFCs) in this segment namely Muthoot Finance, Manappuram Finance and Muthoot Pappachan have interest in the range of 20-22% on these loans as compared to 36-40% levied by the unorganised lenders and pawnbrokers.

"The change in our holdings and an increase in loan book size are chiefly due to a shift of business from the unorganised to the organised market," said VP Nandakumar, chairman, Manappuram group.

George Alexander, MD, Muthoot Finance, also said, "The rise in our gold loan portfolio is because of a gradual shift from unorganised pawnbrokers to the organised lending market."


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