India Gold Loan Market Hits 18.6 Lakh Crore in FY26

India's gold loan market grew 50% year-on-year in FY26, reaching ₹18.6 lakh crore as of March 2026. According to a thematic report by Motilal Oswal Financial Services, this expansion was primarily fueled by a 60% increase in gold prices and repeat borrowing rather than the acquisition of new customers or increased physical gold pledges.

Data from the report shows that the combined gold pledged with Muthoot Finance and Manappuram Finance remained stagnant between 260 and 265 tonnes, with their combined customer base holding at approximately 9 million. Repeat customers accounted for 90% of originations, leading Motilal Oswal to warn that this trend poses a risk of overleveraging within the sector.

Despite these risks, asset quality remains healthy, with early-stage delinquencies among non-banking financial companies dropping to 0.56% in March 2026. The industry is projected to maintain a compound annual growth rate of 28% through FY28, with the potential to exceed ₹30 lakh crore.