Gold loans made two Indian families billionaires: How their lending empires exploded
How Muthoot built a gold-loan empire
The Muthoot family’s financial history dates back to 1887, when Muthoot Ninan Mathai started a retail and wholesale provision store in Kerala. As the business expanded, the family began lending money to estate workers and farmers through chit funds.
The family entered gold loans in 1939. Four decades later, the business was divided among Ninan Mathai’s three sons, with the eldest, Mathai George Muthoot, establishing the lending company that became Muthoot Finance.
Today, Muthoot Finance is India’s largest gold-loan company and the country’s fifth-most-valuable non-bank lender, according to Bloomberg News. The company holds about 210 tonnes of gold as security, while its gold-loan business has quadrupled since 2020 to $18.5 billion as of June.
The company has benefited from both growing demand for gold-backed credit and a sharp rise in gold prices over the past five years. The family has also diversified its interests into mortgages, information technology, energy, real estate, education, healthcare and hospitality.
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Manappuram’s shift to gold-backed lending
V.P. Nandakumar’s journey similarly began with a traditional lending business. At 32, he took over his father’s pawn-broking and money-lending operation in Valapad, Kerala. By the mid-1990s, the lending company had listed on the stock exchange.
The business later shifted its focus more decisively toward gold loans. In 2007, Nandakumar sought expertise from ICRA, which estimated that Indian families held between 18,000 tonnes and 25,000 tonnes of gold.
That insight helped shape Manappuram’s strategy, with the company refocusing its core identity around gold loans and raising $14 million from Sequoia Capital.
Today, Manappuram is the second-largest gold lender in India, with around three million customers and approximately $6 billion in gold-loan assets. It holds about 63 tonnes of physical gold as security.
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| Metric | Muthoot Finance | Manappuram Finance |
|---|---|---|
| Wealth of founder/family | $9.9 billion | $1.4 billion |
| Gold-loan assets | $18.5 billion | Around $6 billion |
| Gold held as security | 210 tonnes | 63 tonnes |
| Customers | — | Around 3 million |
| Position in gold lending | India’s largest gold-loan company | India’s second-largest gold lender |
| Gold-loan growth | 4x since 2020 | — |
| Gold-loan business history | Entered gold loans in 1939 | Refocused on gold loans in 2007 |
| Other businesses | Mortgages, IT, energy, real estate, education, healthcare, hospitality | Microfinance, housing finance, business loans, vehicle finance |
Source: Bloomberg News
Why gold loans have scaled
The two businesses show how an age-old form of borrowing has been converted into a modern financial-services model. Gold provides collateral that can be pledged for credit, while lenders have built large branch networks and diversified into other forms of lending.
Both companies have also expanded beyond gold loans. Manappuram has moved into microfinance, housing finance, business loans and vehicle finance, while Muthoot has diversified across multiple sectors. For the families behind them, however, gold-backed lending remains the foundation of fortunes that now run into billions of dollars.
Source: www.businesstoday.in