Google India has partnered with Muthoot Finance, a leading non-banking financial company (NBFC) that specializes in gold loans. 

This collaboration aims to provide gold-backed loans to small businesses and consumers, particularly in rural areas, through Google Pay.

In a statement at the Google for India event, the company announced, "People across India can now access this credit product with affordable interest rates and flexible usage options, providing both convenience for borrowers and security for lenders." 

Google Pay, the company’s digital payments platform, will facilitate this offering.

Sharath Bulusu, Director of Product Management at Google, emphasized India's deep cultural connection with gold, noting that Indian households hold over 11% of the world's total gold. 

"This asset can be mobilized for economic activity, which is the core idea behind these loans," Bulusu added.

Google Pay is also set to partner with Aditya Birla Finance Limited, another NBFC, to expand its gold loan services. 

Bulusu highlighted that Google is ensuring responsible lending practices, focusing on minimizing risk for both users and lenders. "Partnering with reputed organizations is crucial for us, and promoting financial inclusion is a key priority," he said.

Currently, more than 80% of gold loans in India are utilized by customers from Tier-II and smaller cities. 

According to ICRA, the organized gold loan market is projected to exceed ₹10 trillion by FY25 and could grow to ₹15 trillion by March 2027.

How Gold Loans Differ from Personal Loans

Gold loans allow individuals to use their gold jewelry or coins as collateral to secure funding. 

This form of credit is attractive because it offers fast access to cash, as the gold’s value can be quickly assessed without the need for extensive credit checks.

On the other hand, personal loans are unsecured, meaning they don’t require collateral. 

Borrowers receive a lump sum of money, which is repaid over a fixed period. 

Personal loans are typically used for a variety of purposes, including covering medical expenses, travel, home improvements, or debt consolidation.

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