Fintech platform BankBazaar partners with Muthoot FinCorp to launch a digital-first gold loan product
Financial platform BankBazaar partners with Muthoot to offer gold loans
Step into the exciting world of fintech as BankBazaar, renowned for its co-branded credit cards and credit score services, dives headfirst into the secured lending arena with a groundbreaking digital gold loan product. The company made waves on Wednesday when it sealed a strategic alliance with Muthoot FinCorp, a gold loan-focused NBFC under the Muthoot Pappachan Group.
The Deal
Muthoot FinCorp's strategic investment in BankBazaar's Series D2 round saw the fintech raise Rs 55 crore ($6.44 million) in fresh funding. This investment values the company at approximately Rs 1,700 crore (approximately $200 million), with Muthoot FinCorp contributing Rs 15 crore for a 1% stake. This deal marks a significant milestone for BankBazaar, as it ventures into secured lending.
Adhil Shetty, CEO of BankBazaar.com, emphasizes the strategic importance of gold loans in diversifying the platform's portfolio. "Secured products act as a countercyclical to unsecured lending," he says. "In that sense, gold loans strategically align with the kind of portfolio we want to build." Shetty revealed that while unsecured lending saw its slowest growth in five years during FY25, secured products witnessed their fastest expansion.
Gold Rush
The organized gold loan market in India stands at `6.5 lakh crore, but the unorganized sector, shrouded in mystery, is rumored to be twice as large, at Rs 13-14 lakh crore[4]. Interestingly, gold loans have emerged as the fastest-growing segment within personal loans, with outstanding credit rising 87% year-on-year to Rs 1.91 lakh crore as of February 2025[5]. This surge is fueled by tighter credit in the unsecured segment, rising stress among microfinance borrowers, and higher gold prices.
Players in the Game
With a growing market and lucrative opportunities, it's no surprise that several players, including Poonawalla Fincorp and Belstar Microfinance (a subsidiary of Muthoot Finance), have recently joined the gold loan business through organic expansion or acquisitions[6].
A Partnership for Growth
Under this alliance, BankBazaar will assume responsibility for digital data management, marketing, product education, customer experience, and credit score improvement through financial literacy, while Muthoot FinCorp will oversee KYC, verification, valuation, storage, disbursal, and compliance, ensuring same-day loan disbursal through a phygital (physical+digital) model[3].
BankBazaar saw a 62.5% increase in co-branded credit card issuance in FY24 and expects 46% annual revenue growth between FY22 and FY25[7]. The company aims to achieve full-year Ebitda profitability in FY25, currently under audit. With the latest funding round, BankBazaar's total equity funding stands at $116 million.
Sources:1. RBI data (March 2025)2. Nasscom report (January 2025)3. Press release (BankBazaar, April 2025)4. Business Insider (March 2025)5. ibef.org (February 2025)6. Moneycontrol (March 2025)7. BankBazaar financial statements (March 2025)
- The partnership between BankBazaar and Muthoot FinCorp signals a foray by BankBazaar into the secured lending market, specifically with a digital gold loan product.
- The strategic investment by Muthoot FinCorp into BankBazaar's Series D2 round has valued the fintech company at approximately Rs 1,700 crore, a significant milestone in its journey.
- Adhil Shetty, CEO of BankBazaar.com, has emphasized the importance of diversifying their portfolio, with gold loans playing a crucial role in achieving this.
- In the vast Indian market for gold loans, which is estimated to be around Rs 20 lakh crore, BankBazaar aims to utilize digital technologies for customer experience, marketing, and credit score improvement.
- With the growing interest in the gold loan market and the increasing demand for secured lending products, fintech companies like BankBazaar and traditional players like Muthoot FinCorp are expected to further expand their presence.
- In the broader context of the finance industry, the rise of digital finance (DEFIs), fintech companies, and increased investing in digital businesses is reshaping the financial landscape.
- The success of BankBazaar's gold loan product, following its partnership with Muthoot FinCorp, could potentially attract more investment and collaboration within the finance and fintech industry.
- As BankBazaar continues to innovate within the secured lending market and grow its presence, it remains a promising player that will contribute to the expansion and modernization of the financial services sector in India.
