Muthoot Finance and Manappuram Finance together have held roughly 260–265 tonnes of pledged gold over the past two years. Their combined borrower base has remained near 9 million. Yet the value of their outstanding loans has increased as gold has become more expensive.

Rising prices make gold already held by lenders more valuable, creating room for additional loans to existing customers. Repeat borrowers made up 82% of fresh gold lending in 2025, compared with 76% in 2022. The report separately noted that 90% of loan originations involved borrowers who already had gold loans.

That dependence raises concerns about borrowers taking on more debt than they can repay. A higher collateral value does not necessarily mean stronger repayment capacity. If gold prices drop sharply, the security could become insufficient to cover the outstanding borrowing, exposing lenders to losses when customers default.

For now, repayment indicators have improved. Among NBFCs, early payment delays fell to 0.56% in March 2026 from 2.15% a year earlier. India’s gold loan market stood at ₹18.6 lakh crore in March 2026. Motilal Oswal expects annual growth of 28% through 2028, with outstanding lending potentially exceeding ₹30 lakh crore by March 2028.