Google India has partnered with Muthoot Finance, a non-banking financial company (NBFC) specializing in gold loans.
This partnership will enable small businesses and consumers, particularly in rural areas, to access gold-backed loans through Google Pay.
“People across India can now access this credit product with affordable interest rates and flexible usage options, providing convenience for borrowers and security for lenders,” the technology company stated on Thursday during its Google for India event this year. Google Pay is the company’s digital payments service.
Sharat Bulusu, Director of Product Management at Google, stated, “Indians have a deep cultural connection with gold that extends beyond just investment.
This is why Indian households hold over 11 percent of the world’s total gold. This asset can be used for economic activity, and that’s the concept behind the loan.”
The company will also collaborate with another non-banking financial company, Aditya Birla Finance Ltd, for gold loans.
Bulusu stated, “We are ensuring that we handle this responsibly so that the risks for both users and lenders are well managed. It’s crucial for us to partner intelligently with reputable companies. The second focus is on inclusion.”
More than 80 percent of gold loans are taken out by users in tier-2 and smaller cities.
According to ICRA, the organized gold loan market is expected to exceed Rs 10 trillion in FY25 and could reach Rs 15 trillion by March 2027.
How is a gold loan different from a personal loan?
Gold loans enable borrowers to use their gold jewelry or coins as collateral to secure a loan.
This type of loan offers quick access to funds since lenders can easily assess the value of the gold without needing extensive credit checks.
Personal loans are unsecured financing options that provide borrowers with a lump sum to be repaid over a set period.
These loans can be utilized for various purposes, including medical emergencies, travel funding, home renovations, or debt consolidation.
