Gold carries a special significance for Indian consumers, but the process of unlocking its value can be difficult – partly because many Indians do not have a credit rating and there is also social stigma associated with visiting a pawnbroker – but two Delhi-based entrepreneurs believe they have found a solution with a new digital app.
The potential market is huge, with the World Gold Council estimating that Indians own around 25,000 tons of gold worth more than $1.4 trillion. Analysts believe that monetising even a third of the total could add 2% to GDP growth.
How does it work?
- Deepak Abbot and Nitin Misra, two former executives at Indian financial startup Paytm, told TechCrunch that many Indians keep their gold and other precious items in a bank safety deposit box. But they can be charged as much as $65 a month for this service, there is no insurance and there is also a deposit to be paid.
- Abbot and Misra say consumers can get a better deal by going digital. Their company, indiagold, offers a similar locker service for as little as $1.36 a month, including full insurance coverage.
- Consumers sign up to the indiagold app, an agent visits their home to weigh the gold and, once deposited in a safe box, the app displays the real-time value of their property alongside an offer of a line of credit that can be accessed within seconds.
- Customers can also borrow against the value of their deposits at a maximum interest rate of 1%.
“We think this is the only way this huge market can really be addressed, and now we are beginning to scale our efforts” – Nitin Misra, co-founder of indiagold.
Sourced from TechCrunch