Desperate Indians Default on Doorstep Gold Loans

By John Jeffay / July 12, 2021 / www.idexonline.com / Article Link

(IDEX Online) - Desperate Indians are selling their gold jewelry as the pandemic pushes them further into poverty.Many take out doorstep gold loans in the hope they'll find a way to repay, but increasing numbers are defaulting, and end up forfeiting their valuables.One of India's biggest gold loan companies, Manappuram, which has over 4,000 branches, says it auctioned $54m of customers' gold in the three months to March.That compares with just over $1m in the previous nine months, according to a Bloomberg news report.These "distress sales" are likely to increase even more if India suffers a third Covid wave. More than 200m adults in India earn less than the $5-a-day minimum wage.The net effect of gold loans and increased sales of gold direct to jewelers is that India will become less reliant on imports from Switzerland, its main supplier. 

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