Gold loans in India have experienced remarkable growth, expanding fourfold since March 2022 and emerging as the second-largest segment in the retail credit portfolio after housing loans, with an outstanding value of ₹16 trillion. According to TransUnion CIBIL's Gold Loan Landscape report, this rapid expansion has positioned gold loans as a significant component of India's financial services landscape, driven by increasing demand for credit against gold assets. However, rising delinquency rates signal emerging credit stress, with overall delinquency reaching 1.1% for gold loans taken in the first half of 2025, though this increases to 1.5% for loans exceeding ₹2.5 lakh, more than double the 0.7% rate for smaller loans.
Southern states have maintained their strong position in the gold loan market, with Tamil Nadu, Andhra Pradesh, and Karnataka together accounting for 51.1% of total gold loan originations in the country. As reported by The Economic Times, Tamil Nadu leads by a wide margin with a 25.8% share and 23% growth in volumes, followed by Andhra Pradesh with 13.6% share and 34% growth, and Karnataka contributing 11.7% of the market with 41% increase. The broader southern region continues to reinforce this dominance, with Kerala contributing 9% of total originations with 16% growth and Telangana holding 8.8% share with a sharper 55% rise.
While southern states maintain market leadership, northern and western regions are witnessing significant growth from lower base levels. According to the TransUnion CIBIL report, Maharashtra accounts for 5.8% of originations with 40% growth, West Bengal holds 3.6% with 46% increase, Gujarat's share stands at 3.3% with 51% growth, and Odisha contributes 3% with 21% rise. Notably, Uttar Pradesh, despite being India's most populous state, accounts for just 2.7% of total gold loan originations but has recorded the highest growth among the top ten states at 75%, indicating rising adoption from a low base.
The report indicates that while the south remains the core market for gold loans, expansion is increasingly visible in emerging regions including Assam, Uttar Pradesh, Rajasthan, Madhya Pradesh and Gujarat. As noted by The Economic Times, much of this growth is driven by lower base levels, which are translating into sharper percentage increases in loan originations. This regional diversification suggests the gold loan market is becoming more geographically dispersed, though southern states continue to dominate overall market share and volume growth.
The gold loan market has witnessed significant leverage increases, with the average outstanding per borrower climbing from ₹1.9 lakh to ₹3.1 lakh according to the TransUnion CIBIL report. The primary catalyst behind this explosion is the spike in gold valuations, with prices doubling since March 2023 and rising 57% since May 2025, reaching a high of ₹1,76,306 in January 2026. The average ticket size has more than doubled, from ₹90,000 in early 2022 to ₹1.96 lakh by late 2025. However, experts warn that margin calls when gold prices depreciate pose significant risks, with prices having dipped over 12% to ₹1,33,513 in March 2026 and a 10% slip over the last two months. The most concerning trend is that defaulting borrowers using gold loans as a last resort are 1.6 times more likely to be cut off from the credit system entirely.
