World Bank to invest $35 mn in Gold loan market |
International Finance Corporation or the IFC, a member company of the World Bank group, will invest $35 million in Indian Gold loan finance companies in a bid to tap the Indian gold loan market. IFC is making its first investment in a gold-loan finance company to create opportunities for the rural and poor households to transition from informal to formal forms of credit Through this investment, they intend to support the Indian government to unlock the value of idle gold and bring a large part of India`s unofficial savings into the formal financial system. IFC will also provide advisory services to bring global best practices to Indian companies and help them build capacity in MSME lending. IFC`s investment will help Indian finance companies to deepen their reach in rural and semi-urban areas to offer people a viable alternative to informal credit. According to the World Gold Council, India has 23,000 tons of gold with an estimated market value of $1 trillion. However, banks and NBFCs have a gold loan market size of just $19.6 billion, which leaves the field open to pawn-brokers and usurious money lenders in rural areas.
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