Gold loans have emerged as the leading segment in India’s retail credit market, accounting for loan volumes at 36 per cent and around 40 per cent by value, driven by rising gold prices and increasing consumer preference for secured borrowing, a report said on Tuesday. 

The report by TransUnion CIBIL showed that the surge has been supported by a sharp increase in ticket sizes, with the average gold loan amount rising significantly over the past two years to around Rs 1.9 lakh in the December 2025 quarter.

The report also noted that the consumer market indicator (CMI) — a major gauge of credit market health — rose to 102 in the December 2025 quarter, up from 97 a year ago and 100 in the preceding September quarter which is the third consecutive quarter of improvement.

It further highlighted that gold prices have encouraged consumers to unlock value from their holdings, leading to a strong rise in both loan demand and disbursements.

Notably, gold loans are witnessing expansion beyond their traditional stronghold in southern India, with faster growth now seen in northern and western states such as Uttar Pradesh, Madhya Pradesh and Rajasthan.

The segment is also attracting a more diverse borrower base, with over half of the loans being availed by prime and above-category customers, indicating growing acceptance of gold loans as a mainstream credit product.

The report noted that while credit supply eased following festive demand and GST-related momentum, the moderation reflects seasonal trends rather than a structural slowdown.

Demand for credit remained strong, particularly in semi-urban and rural areas, with non-metro regions accounting for 54 per cent of the total borrower base, up three percentage points year-on-year. The share of new-to-credit consumers also increased to 15 per cent.

Meanwhile, auto loans saw stable volumes during the post-festive period, supported by demand in the affordable mid-segment category, while supply in the segment rose on a daily average basis compared to the previous year.