Gold loans surge as small borrowers shun MFIs: 122% jump in June, shows RBI data; soaring prices, lower rates fuel shift

Lower-income individuals are increasingly opting for gold loans over microfinance due to rising gold prices and stricter MFI lending norms. Gold-backed loans have surged by 122%, while microfinance loans have dropped significantly. Lower interest rates on gold loans and a cultural affinity for gold are also driving this shift, making gold loans a mainstream financial option.