All That Glitters: India’s Gold-Backed Loan Provider Benefited From Pandemic-Induced Cash Crunch

This story is part of Forbes’ coverage of India’s Richest 2020. See the full list here.

The wealth of M.G. George Muthoot, chairman of gold-backed lending firm Muthoot Finance, rose by $1.75 billion thanks to a stock price rise of more than 60% since the last list. The Kochi-based lender offers loans using gold as collateral, and now holds 165 tonnes of it, worth over $10 billion.

Gold-backed loan demand has surged amid a pandemic-induced cash crunch. “Many traders and small business owners who are trying to restart and get back on their feet during this pandemic are taking out gold loans,” says Muthoot, 71. For the quarter ended June 30, Muthoot Finance saw a 16% year-on-year increase in consolidated loans to 465 billion rupees ($6.2 billion) and a 52% net profit rise to 8.6 billion rupees.

Gold’s popularity remains strong in India. G. Rajendran, who founded Chennai-based GRT Jewelers in 1964, joins this year’s the list with a $1.54 billion fortune. The 78-year-old’s company sells diamond, gold, silver and platinum jewelry.