The story of Rupeek’s gold loan is set in the territory of Muthoot, Manappuram










Normally, the launch of a new credit card wouldn’t turn heads. The credit card that six-year-old Bengaluru-based Rupeek

spear


spear

mint
Fintech company Rupeek offers instant credit via gold-powered card
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Feb. 22, however, got a few second looks. Rupeek is a gold-backed lending fintech, and the credit card — one of its first steps in expanding its product mix — is also gold-backed.

The company has achieved an annual loan disbursement rate of

$1 billion


$1 billion

Bloomberg
Indian fintech grants $1 billion a year in gold-backed loans
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in December 2021. The growth impacted by Midas is driven by growing demand for gold-backed loans, driven by pandemic-induced economic distress. Loans secured by gold jewelery jumped 141% between January 2020 and December 2021, reaching 70,871 crore rupees ($9.4 billion), according to data from the Reserve Bank of India (RBI).

The startup opted for a service-at-home model, allowing clients to monetize their gold holdings while granting them a higher degree of confidentiality, which appeals to those who might otherwise have avoided borrowing against their gold. “Over 60% of our monthly customer base takes out the first gold loan of their life with us,” said founder Sumit Maniyar.

Banks as a source of cheap funds have also contributed to the rise of Rupeek. Take Federal Bank’s partnership with Rupeek. According to Mohan K, National Head of Agriculture, Micro and Rural Banking at Federal Bank, the bank’s loan portfolio under the partnership grew from around Rs 50 crore ($6.6 million) in 2019. to nearly 1,200 crore rupees ($159 million) by the end of 2021.

“Banks are actually eating away at NBFC’s market share,” Mohan said. The Ken, referring to the advance enjoyed by non-bank gold lending finance companies (NBFCs) like Muthoot Finance Ltd and Manappuram Finance Ltd. The companies are two of India’s largest gold-backed lenders.

Rupeek, however, does not target the same set of customers as existing players. Gold-backed lenders generally tend to attract low-income people, who pledge relatively smaller amounts of gold. Rupeek’s customers are more affluent, attracted by its better services and a more digital process. This allows Rupeek to write loans at note sizes greater than Rs 1 lakh ($1,300), on average, according to Maniyar.

finance gold

Rupeek has raised a total of $172 million in funding. Its most recent round in January brought in $34 million and was led by Lightbox, with participation from existing investors GGV and Bertelssman.

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