Gold financiers are a bright spot in India’s crisis-hit financial sector

Gold financiers are a bright spot in India’s crisis-hit financial sector

India’s shadow banking industry is going through one of its worst-ever crisis. Two major gold loan financiers—Muthoot Finance and Manappuram Finance—reported stellar results in the March quarter. This benefits gold loan financiers in two ways: Firstly, these NBFCs can lend more against gold as its value rises, and secondly, it provides a stronger margin of safety if a borrower defaults.