The government’s move to raise import duties on gold may have triggered concerns around jewellery demand and consumer sentiment, but for the gold loan industry, the development could create new opportunities. According to Nirmal Jain, from IIFL Finance the higher duty structure could work positively for lenders focused on gold-backed financing, especially at a time when small businesses are grappling with inflationary pressures and supply chain disruptions.
Speaking to ET Now, Jain explained that an increase in gold prices effectively raises the value of collateral available with borrowers, thereby increasing the amount they can borrow against their jewellery.
