India's Gold Loan Boom Expands Beyond Traditional South India Strongholds

India's Gold Loan Market Sees Explosive Growth Across the Country

India's gold loan market has experienced a significant boom in recent years, with the outstanding gold loan portfolio surging sevenfold from Rs 2.63 lakh crore in March 2020 to Rs 18.63 lakh crore by March 2026. This growth is not limited to southern India, which still accounts for over three-fourths of the country's gold loan portfolio. In fact, states such as Uttar Pradesh, Bihar, and Rajasthan have witnessed explosive growth in borrowing against gold since the pandemic, according to a Moneycontrol analysis of data from CRIF High Mark, a credit bureau.

The fastest growth in gold loans has come from smaller and traditionally underpenetrated markets. For instance, gold loans in Arunachal Pradesh expanded by more than 28 times between FY20 and FY26, while Assam saw growth of nearly 17 times and Tripura over 13-fold. Among large states, Uttar Pradesh and Bihar rose more than 13 times, and Rajasthan rose more than 11-fold.

Despite this rapid expansion elsewhere, southern India continues to dominate the gold loan ecosystem. Tamil Nadu alone accounted for 32 percent of India's total gold loan portfolio as of March, with outstanding loans of nearly Rs 5.97 lakh crore. Andhra Pradesh accounted for 16.6 percent, while Karnataka and Telangana contributed 9.8 percent and 8.6 percent, respectively.

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However, the southern dominance is gradually weakening. Tamil Nadu's share of India's gold loans has declined steadily from 36.4 percent in March 2020 to 32 percent by March 2026. Kerala has seen an even sharper decline in share, from 14.1 percent to 7.8 percent, despite the state's portfolio nearly quadrupling during the period.

Northern and eastern states are beginning to occupy a larger share of the market. Uttar Pradesh's share rose from 1.2 percent in FY20 to 2.3 percent in FY26, while Rajasthan increased from 1.4 percent to 2.2 percent. Bihar, though still relatively small, doubled its share from 0.3 percent to 0.6 percent over the same period.

In absolute terms, Uttar Pradesh's gold loan portfolio expanded from just Rs 3,120 crore in March 2020 to over Rs 42,344 crore by March 2026. Rajasthan's portfolio grew from Rs 3,700 crore to Rs 41,727 crore, while Bihar's rose from under Rs 900 crore to over Rs 11,728 crore.

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The sharp rise in gold loans coincides with record gold prices and a growing preference among households for secured borrowing over unsecured personal loans. According to Sunil Agithakaliya, Whole Time Director at CRIF High Mark, gold loans have soared roughly 50 percent year-on-year to around Rs 18.6 lakh crore as of March 2026, making them the fastest-growing major retail credit segment and now second only to home loans.

Gold loans are also occupying a much larger share of household consumption borrowing across states. At the all-India level, gold loans accounted for 15.7 percent of total consumption loans in March 2026, up sharply from just 5.4 percent in March 2020.

The trend is now becoming visible in northern states as well. Rajasthan's share of gold loans in total consumption credit climbed from 1.5 percent to 7.2 percent over the six-year period, while Uttar Pradesh rose from 0.9 percent to 4.9 percent and Bihar from 0.9 percent to 4.5 percent.