Gold loan sees fastest growth in overall securitisation volume in June quarter

Bundled pool of gold loans saw the fastest growth in the overall securitisation volume in the June quarter.

Gold loan securitisation, which did not have much share in the total volume in the corresponding quarter last year, stood at Rs 5,390 crore or 11% of the total securitisation volume of Rs 49,000 crore, according to CRISIL Ratings.

The rating agency said that the jump in the share of gold-loan securitisation is supported by lifting of regulatory curbs on a leading originator.


Total volume of loan securitisation, which is a source of liquidity for banks and non-bank lenders as they club different loans and sell it to investors, jumped 9% YoY in the first quarter of the fiscal year.

Share of vehicle loans (including commercial vehicles and two-wheelers) held steady at 41% in the June quarter, while that of mortgage-backed loans decreased to 21% from 25% in the first quarter of the previous fiscal. The decline is largely attributed to lower volumes originated by a large private bank.

Similarly, securitisation backed by microfinance loans declined to 11% from 14%. The industry is trying to emerge out of rising delinquencies by focusing on strengthening underwriting processes and scaling back disbursements in the near term, CRISIL said.

Meanwhile, the share of personal loans and business loans decreased 200 basis points each to around 9% and 7%, respectively.

“The top NBFCs have remained steadfast in tapping the securitisation market as a strategy for resource profile diversification. On the other hand, originations by small and mid-sized NBFCs - mostly present in microfinance, unsecured personal loans and business loan segments – has moderated as both, the NBFCs and investors, remain cautious in these segments,” said Aparna Kirubakaran, Director, Crisil Ratings.