Cash disbursement curb fails to thwart gold-loan NBFCs’ growth

Chandigarh, August 16

With demand for credit remaining robust, non-banking financial companies (NBFCs) focusing on gold loans are expected to see reasonable growth in disbursements this fiscal, according to CRISIL ratings analysis.

Their growth in the recent past has been underpinned by operational resilience, agility and adaptability to evolving regulations. A key regulatory development this fiscal was the advisory in May 2024 that curbed cash disbursements.

Growth for gold-loan NBFCs has also been supported by favourable movement in gold prices. Moreover, given their robust risk management practices, the NBFCs are well placed to withstand adverse gold price fluctuations as seen in the past few weeks.

Ajit Velonie, senior director, CRISIL ratings, said: “Early evidence of growth momentum has been seen in the disbursements for June 2024, which were 12 per cent higher than the average monthly disbursements in the preceding quarter.” — TNS