Capri Loans plans to open 1500 gold loan branches over the next 5 years in Tier 3, 4, and 5 cities

Capri Loans, an NBFC focused on MSME credit and housing finance, plans to open 1500 gold loan branches over the next 5 years in Tier 3 and 4 cities to target the unorganised sector. It aims to build a gold loan book size of Rs 8,000 crore given the rise in credit needs among people. The company commenced operations of its gold loan business on Tuesday with 108 branches. Capri Loans will provide loans up to 75 per cent of the total pledged gold along with complimentary insurance equivalent to the pledged value of gold ornaments.  

“During and post COVID credit need has increased because of multiple reasons. One of the reasons is options of credit has reduced. In India, huge gold is available in households, which is around 30,000 tonnes according to a study. Instead of selling gold people are unlocking the value by taking the loan. For those who have a limited source of credit and do not have proper documentation and need cash on an emergency basis a gold loan is one of the best methods for unlocking the value," said Ravish Gupta, Business Head – Gold Loan, Capri Global Capital.

These gold loan branches are equipped with an artificial intelligence-powered security vault to offer safety to the gold ornaments. The NBFC has launched 30 gold loan branches across Delhi-NCR and Haryana, followed by Rajasthan, Madhya Pradesh, Gujarat, Uttar Pradesh, and Maharashtra. The company aims to operate 200 gold loan branches by H1 FY23 in Northern and Western India. The gold loans are generally available at the interest rate of 12-24 per cent depending on the type of loan and tenure of the loan.  

Rajesh Sharma, Managing Director, Capri Global Capital Ltd. said, "We are excited to take the next journey of tech-advanced gold loan as we foresee immense scope in the gold loan market. The financial distress due to the pandemic has increased demand for credit across low-to-medium income households. Due to the emotional value associated with gold, people pledge their gold as collateral and secure a short-term loan rather than selling it. The trend is evident in the country's rural and semi-urban geographies. Through our gold loan product, we aim to empower our customers to take advantage of their secured assets and finance their various needs other than financial emergencies. We are bullish for Tier III, IV, and V cities of the North and West part of the country."

Gupta added, " An unorganised sector still dominates the gold loan business in India because of two major concerns of the borrower - security of their asset and lack of trust to pledge the gold to unknown. Capri gold loan branches are equipped with AI-powered security vaults to mitigate their safety concerns for their assets. Additionally, our 100 per cent free insurance, equivalent to the pledged value of gold, will make the borrowers worry-free about their asset security. Our dedicated relationship manager for each customer will help borrowers have the freedom to discuss transparently and get the desirable advice for which they earlier relied on ancestral money lenders or Jewelers. Our competitive interest rate and transparent payment options will safeguard our customers from a cumulative higher rate of interest. Thus, giving us an extra edge in our operational markets. We are confident that our lucrative gold loan product will help us penetrate the northern and western geographies and achieve our business target for the next five years".