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Google Pay partners with Muthoot Finance to sell gold-backed loans
Source: Business Standard
Google India has announced a partnership with Muthoot Finance, a non-banking financial company (NBFC) specialising in gold loans. The partnership will provide gold-backed loans to small businesses and consumers, especially in rural areas, through Google Pay.
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“People across India can now access this credit product, with affordable interest rates and flexible usage options – delivering flexibility to the borrower, and security to the lender,” said the technology company at its Google for India event this year in a statement on Thursday. Google Pay is the company’s digital payments service.
“Indians have a long cultural relationship with gold that goes long beyond investment, which is why over 11 per cent of the world’s total gold is held by Indian households. This asset can be mobilised for economic activity and that is the idea for the loans,” said Sharath Bulusu, director, product management at Google.
The company will also partner with Aditya Birla Finance Limited, another NBFC, for gold loans. “We are making sure that we are doing it responsibly, so risk is well-controlled for the user as well as the lender. So making that match sensibly working with reputed partners, is very important for us. And the second one is inclusion,” said Bulusu.
More than 80 percent of gold loans go to users in Tier-II and smaller cities. The organised gold loan market is expected to surpass Rs 10 trillion in FY25 and may reach Rs 15 trillion by March 2027, according to ICRA.
How gold loan is different from personal loan
Gold loans allow borrowers to use their gold jewellery or coins as collateral to secure funding. This type of credit offers quick access to money since lenders can easily evaluate the gold’s value without requiring lengthy credit checks.
Personal loans are unsecured financing options where borrowers receive a lump sum that is repaid over a set period. These loans can be used for various purposes, such as handling medical emergencies, financing travel, home renovations, or consolidating debt.
First Published: Oct 04 2024 | 2:06 PM IST
