Gold loans have been a silent sector that supported millions of households within India for several years. When there was an unexpected cost, medical needs, or business demands, people often looked at gold as an easy source of immediate financial assistance. However, gold loans have been an imperative sector that, despite its progress and relevance, could have experienced rough patches with regards to transparency.

But today, after a decade, there is a marked change in this scenario. The adoption of technology, better regulation, and the emerging importance of NBFCs have created a paradigm shift in gold loans. A traditional and puzzling sector is slowly becoming more transparent, more secure, and customer centric.

India’s Unharnessed Gold Potential

India is said to have an estimated 25,000+ tonnes of gold that belongs to private possession, making it among the biggest gold reserves in the world. It is also a fact that most of it stays unutilized.

NBFCs have realized that they could make a difference here. By introducing order and technology into the gold loan sector, they are enabling families to tap into the value of gold without giving it up.

How Technology Has Changed Experience with Gold Loans

Earlier, taking gold loans required waiting in long queues with vague descriptions and lots of guessing. Several people opted for money lenders because it was convenient, and they were unaware that there were high rates and a lack of transparency.

1.Today, NBFCs have made this process better in several ways:

  • Transparent Valuation and Pricing
  • Real time gold price updates
  • Clear Loan-to-Value Calculation

2. Secure, Digital Processes

Automated verification processes, and safe documentations have replaced traditional procedures. Not only does it accelerate the process but also instils trust.

3. Fast Loan Disbursement

Those things which would have normally taken days are now achieved within hours from appraisal and approval to fund disbursement.

4. Migrating Borrowers from Unorganized Lending

For many years, local moneylenders were the primary option for gold loans. While they offered convenience, borrowers often faced unclear practices, inconsistent valuations, and extremely high interest rates within a completely opaque system. With the rise of NBFCs, this situation has changed significantly borrowers now have access to a safer, more transparent, and fairly priced alternative.

4. Driving Financial Inclusion

Gold loans have always been an essential source of credit for people who do not have easy access to credit. Whether it’s a shopkeeper requiring daily working capital or a family requiring an unexpected expense, gold loans with technology have made it easier and more accessible.

NBFCs are helping significantly in making these services available to more and more households, especially in semi urban and rural regions.

The Road Ahead: Trust, Innovation, and Customer Focus

The gold loan market is changing quickly, and technology is playing a big role in that shift. With better digital tools coming in, NBFCs are now able to offer gold loans that are not just quicker and easier, but also far more secure. In the coming years, improvements in digital checks, valuation methods, and customer experience will continue to raise the bar. What truly stands out, though, is that NBFCs are no longer just refining a product they are building trust and setting a stronger, more responsible standard for lending in the industry.

Priyank Kothari, Director of Arvog