Google And Muthoot Finance Team Up To Provide Gold Loans To Small Businesses Via Google Pay

New Delhi, Oct 4 (KNN) Google India has announced a strategic partnership with Muthoot Finance, a leading gold loan non-banking financial company (NBFC), to provide gold-backed loans through the Google Pay app.

The collaboration, unveiled at the annual Google for India event, aims to expand access to credit for small business merchants and consumers, particularly in rural areas of India.

The initiative seeks to leverage the substantial gold holdings of Indian households, estimated at approximately 11 percent of the world's total gold.

Sharath Bulusu, Director of Product Management, Google, emphasised the cultural significance of gold in India and its potential as an economic asset. He highlighted that these loans offer competitive interest rates and flexibility for borrowers while providing security for lenders.

The partnership comes at a time when the gold loan market in India is experiencing significant growth.

According to a recent report by credit rating agency ICRA, the organised gold loan market is projected to surpass Rs 10 lakh crore in the current fiscal year. Furthermore, the overall market for gold loans by banks and NBFCs is expected to reach Rs 15 lakh crore by March 2027.

Data from the Reserve Bank of India (RBI) indicates a substantial increase in loans against gold jewellery, with a nearly 40 percent jump recorded in July compared to the same period last year.

However, the central bank has recently raised concerns about irregularities in gold loan processing, including issues with third-party involvement in loan sourcing and appraisal, as well as valuation practices.

In response to these concerns, the RBI has instructed gold loan providers to conduct comprehensive reviews of their policies, processes, and practices to address any gaps and implement necessary remedial measures.

The central bank is also preparing to launch its Unified Lending Interface (ULI) platform, which aims to address unmet credit demands across various sectors, with a focus on agricultural and MSME borrowers.

This move into gold-backed loans expands Google India's presence in the retail loan sector, following its entry last year with merchant loan offerings in collaboration with lenders such as DMI Finance and ePay Later.

The partnership with Muthoot Finance represents a significant step in Google's efforts to provide innovative financial solutions to underserved segments of the Indian market.

(KNN Bureau)