Loan against physical gold has been a regular practice in India for ages. While companies such as Muthoot Finance and Manappuram Finance along with Rupeek have been dominating the gold loan market, availing loans against digital gold has been unheard of thus far.
Indiagold seems to be changing this by offering up to Rs 60,000 loan against digital gold kept in its locker. According to two Entrackr sources, the Gurugram-based company has been testing a product that will enable its customers to avail loan against their locker balance.
Indiagold provides locker services where customers can store their gold (bought online via Indiagold) and earn 5-6% interest annually on the value of their deposit. Entrackr had exclusively reported about this service in February.
Entrackr has also reviewed the new product which appears to have been rolled out for a limited set of users. It would charge 1% interest on a digital gold loan.
Indiagold appears to be the first digital gold provider in India to offer this feature.
Paytm, Google Pay, PhonePe are some of the other leading players in the digital gold-selling space in India. These companies may partner with Indiagold for enabling loans against digital gold or build it on their own, as per sources.
Entrackr had sent queries to Indiagold to learn more about the new product on Monday. We will update the story if they respond.
Founded by Deepak Abbot and Nitin Misra, Indiagold provides instant gold loans and locker services across Delhi (NCR). According to its website, the company has over 800,000 customers across the NCR region.
The one-year-old venture has already raised Rs 14 crore in a seed round led by Leo Capital, Blume Founders Fund, Sequoia Scout and seven angels including Kunal Shah, Amrish Rau, Kunal Bahl, Ashneer Grover, Miten Sampat, Ramakant Sharma and Sandeep Tandon.
Sources emphasized that the company is in the advanced stages to raise a Series A round as well. Rupeek is Indiagold’s direct competitor along with established players like Muthoot and Manappuram. According to industry estimates, Muthoot and Manappuram dominate over 70% of gold loans in the country.