Gold Loans Take 36% Of New Retail Credit As Small-Town India Drives Growth

Gold loans have become India’s biggest retail loan segment by fresh originations, with rising gold prices and stronger demand from smaller towns pushing growth sharply higher. 

India’s retail credit market closed 2025 with a clear shift towards gold-backed borrowing. TransUnion CIBIL’s March 2026 Credit Market Report, released on 31 March 2026, said gold loans formed 36% of retail loan volumes and 39% of retail loan value in the quarter ended December 2025. 

The same report showed the Consumer Credit Market Indicator rising to 102, from 97 a year earlier and 100 in the previous quarter. News reports published on 1 April 2026 said the jump came as higher gold prices lifted collateral values and pushed up ticket sizes.

What Is Behind India’s Gold Loan Surge?

The latest data shows gold loans are no longer a niche secured product. TransUnion CIBIL said gold loan originations rose 45% YoY by volume and 108% YoY by value in the December 2025 quarter. The average ticket size touched ₹1.9 lakh, while the ticket size index rose to 189 from 132 a year earlier. Economic Times reported on 1 April 2026 that gold loans are now the 2nd-largest retail credit book by balances, at around ₹16 lakh crore, behind housing loans at ₹44 lakh crore.
 

A sharper regional spread is also visible in the data. TransUnion CIBIL said semi-urban and rural borrowers now form 54% of the total retail borrower base, up 3 percentage points YoY.

Previous Developments That Built Up To This

The build-up had started earlier. TransUnion CIBIL said the supply-side CMI rose to 98 from 91 a year ago, with gold loans contributing strongly to the improvement. Since March 2023, the average gold loan ticket size has risen 1.8x. The report also showed that 54%+ of gold loans were taken by prime and above consumers, showing wider acceptance among stronger borrowers. 

Moneycontrol reported on 1 April 2026 that gold loans are no longer limited to southern states. The fastest origination growth came from Uttar Pradesh at 96%, Madhya Pradesh at 80%, and Rajasthan at 79%. LoansJagat, in a report dated 27 January 2026, also flagged faster gold loan demand in Tier 2 and Tier 3 markets.
 

The figures above are drawn from the official TransUnion CIBIL release, with supporting coverage by Moneycontrol and LoansJagat.

Statements By Stakeholders

Bhavesh Jain, MD and CEO, TransUnion CIBIL, said the retail credit market is seeing stronger participation from first-time and younger borrowers, while credit demand is spreading deeper into non-metro locations. 

Economic Times on 1 April 2026 also reported lenders are becoming more selective, with higher preference for stronger credit profiles as gold loans expand. 

Conclusion

Gold loans are now leading fresh retail credit growth in India. The next phase is clearly coming from smaller towns, higher collateral values and a wider borrower base.