NEW DELHI :
Fino Payments Bank on Tuesday said it aims to double its gold loan sourcing business to ₹2,000 crore in the current financial year on the back of rural demand.
The payments bank said it is in talks with in few NBFCs to source gold loans on their behalf as payments banks are not allowed to lend.
"Fino Payments Bank aims to double the value of its gold loan sourcing business in FY21. It aims ₹2,000 crore gold loan sourcing business for partners riding on rural revival in FY21," it said in a release.
Fino, which turned profitable last fiscal, has already facilitated gold loan sourcing worth ₹1,000 crore in FY2020 as a corporate business correspondent (BC) for a leading bank, it said.
Citing a KPMG report, Fino said India's gold loan market is expected to reach ₹4.6 lakh crore by 2022 with rural areas accounting for more than 66 per cent of the total demand.
Of the estimated 24,000 tonne of gold possessed by Indian households, 60% is in rural areas. Organised sector comprising banks and NBFCs contributes to only 35%, while unorganised players take a big chunk of the gold loan market, according to the report.
"For banks and NBFCs it is an opportunity to tap the large market serviced by unorganised players. We would be keen to associate with like-minded partners to bring their gold loan offerings closer to rural masses and help them avoid the trappings of the informal sector. We expect the demand to grow in FY21 as people turn to gold loans for their personal and working capital requirements.
"We aim to do over ₹2,000 crore of gold loan referral business this fiscal," said Amit Jain, Head (Alliances & PMO), Fino Payments Bank.
He said around 80% of bank's network is in rural areas so it presents a great distribution platform for entities planning to do business in rural India. It already sells health, life and vehicle insurance in rural areas by partnering with these service providers.