There are mortage lenders that give these gold loans at obscene rates, and moreso the terms.
Those very same people who used to go there now go to NBFCs and are charged half the interest rates.
Sure, the ones who can open a bank account will prefer banks.
NBFCs are going to do just fine because their business is dependent on the “black” money part of the economy. Folks who pay nil IT return, cannot go and deposit gold into banks and do the entire paper work. Just won’t work.
I feel, as long as a strong parallel economy exist in India, gold loan nbfcs won’t struggle for growth.
Repayment options are convenient with nbfcs. They require only interest payments. Banks require principal as well.
Fintech disruption is also at play.
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