Google partners with Aditya Birla Finance and Muthoot Finance to offer personal and gold loans #CashNews.co

Google has announced new partnerships to enhance its financial services on Google Pay. The tech giant has teamed up with Aditya Birla Finance to offer personal loans and with Muthoot Finance to provide gold-backed loans.

What are gold and personal loans?

Gold loans allow borrowers to use their gold jewelry or coins as collateral to secure a loan.

This type of financing offers quick access to funds, as lenders can evaluate the gold’s value without lengthy credit checks.

On the other hand, personal loans are unsecured loans that provide borrowers with a lump sum of money to be repaid over a fixed term. These loans can be used for various purposes, including medical emergencies, travel, home renovation, or debt consolidation.

Regulatory context

The launch of these loan products comes at a time when the Reserve Bank of India (RBI) has expressed concerns about the gold loan sector. The central bank recently flagged irregularities after reviewing several supervised entities in the market.

Issues included improper valuation of gold, inadequate monitoring of loan-to-value (LTV) ratios, and insufficient oversight of auction processes for defaulted loans.

Despite these challenges, the outlook for gold loans is promising.

According to ICRA, the organised gold loan market is expected to surpass ₹10 lakh crore this financial year and may reach ₹15 lakh crore by March 2027.

Retail gold loans from non-banking financial companies (NBFCs) are projected to grow by 17-19% in FY2025, reflecting a robust demand for such products.