InvestorQ : Why are banks and gold loan companies trying to chase gold loan customers so aggressively?
Dhwani Mehta made post

Why are banks and gold loan companies trying to chase gold loan customers so aggressively?

Answer
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Khushi Patel answered.
3 months ago


With banks under pressure to curtail NPAs, normal business loans and individual loans may be harder to come by. The 76 day lockdown has caused a lot of financial stress for people and especially to small businesses.

The big challenge is to get access to the necessary sources of financing to bounce back.

With bank loans hard to come by, a major source could be gold loans. It is hardly surprising that apart from the traditional gold loan companies, even the banks are falling over each other to give gold loans against gold. It is also making sense to the borrower.

Farmers and small businesses find it better to opt for gold loans which get disbursed faster and with lesser documentation. This also helps them to monetize their idle gold assets lying at home.

For banks, this is gold loans are lower on the risk scale. World Gold Council has estimated that gold loans could see a sharp spike in this year.