Advertising blitz takes stigma out of gold loans
You see them on prime-time and between cricket match telecasts. Gold loan providers have turned one of the biggest advertisers on television, thanks to enterprising companies that have made these as consumer-friendly as a detergent cake.india Updated: Sep 05, 2011 22:58 IST
You see them on prime-time and between cricket match telecasts. Gold loan providers have turned one of the biggest advertisers on television, thanks to enterprising companies that have made these as consumer-friendly as a detergent cake.
According to the latest report by TAM Media Research, advertisement volumes for gold loans in terms of number of hours of airtime surged by 86% in the January-June period this year over the same period a year ago as financing companies including Muthoot, Mannapuram, HDFC, ICICI and others pitched to woo borrowers.
Historically, gold loans were seen as distress loans to be taken when people were in dire need. The ads now position them as convenience loans for walk-in customers.
In the last 10 years, gold prices have surged 400%.
"Our collateral security for our existing loans will automatically strengthen to that extent and we keep fairly comfortable margins too," said George Alexander, MD, Muthoot Finance.
"Advertisement is a sensible approach to remove the guilt associated with gold mortgage. The trend has made pawning gold as easy as eating a pie," said Santosh Desai, CEO, Future Brands.
"We have seen an increase in the number of gold loans as we increasingly advertise across geographies," said I Unnikrishnan, MD, Manappuram Finance.
Muthoot Finance has already had its public issue of shares, showing a maturing of the industry into an organised one.
A report by Icra Management Consulting Services says the organised gold loan market in India grew at a compounded annual growth rate of 40% between 2002 and 2010, and is poised to expand between 33 and 41% in 2011.