Google is leveraging India’s deep-rooted affinity for gold to expand its reach in the lending market of the world’s most populous nation.
The company said on Thursday that Google Pay has partnered with Muthoot Finance, India’s largest gold-backed loans provider, to offer secured loans to users across the country.
Google said the partnership aims to broaden credit accessibility in a market where traditional lending often falls short. Despite the progress made by financial inclusion initiatives, access to credit remains a challenge for many Indians who lack profiles with local credit bureaus.
Gold holds unique significance in India, with about 1 billion people spending roughly ₹1 trillion annually on gold imports — equivalent to more than one-fifth of global mine output, according to HSBC.
Unlike China, a sizeable portion of this demand comes from lower-income households, and many Indians already own gold, allowing them to secure credit at lower interest rates. Muthoot is undertaking the task of handling, storing and securing the gold from customers as well as in extending the credit, whereas Google is connecting the prospect users to the lender.
A gold-backed solution is crucial to expand credit accessibility in India, said Sharath Bulusu, director of product management for Google Pay, in an interview with TechCrunch. Google’s initiative taps into the cultural, emotional and economic importance of gold, potentially opening new avenues for millions to access formal credit, he added.
“The beauty of this is that it creates a stepping stone for them [the users] to get access to more,” he said. “It’s the first loan that they will take and it gives them a credit report. In the future, they still have the option to take collateralized loan because we have seen that some users repeatedly, even after they have started to build a credit history, choose collateralized loan because of the lower interest rates and familiarity with it.”
This move comes after Google partnered up with Indian banks and other lenders to offer loans to individuals and merchants via the Google Pay app last year. The company on Thursday said it has also partnered with Aditya Birla Finance, one of the largest non-banking financial companies in India, to expand credit accessibility. Google is helping Pay users secure loans starting from just 10,000 Indian rupees ($120).
Google Pay is among the most popular payment apps in India. It processes more than 37% of the 15 billion monthly transactions on UPI, a payments rail built by a coalition of Indians banks. UPI is the most popular way Indians transact online.
Google said it has extended credit to Google Pay users in 13,500 zip codes in India, reaching 70% of the country. 80% of the loans it has disbursed were to users living in smaller Indian cities and towns, the company said. Google has integrated its advanced AI model, Gemini, to handle user inquiries via voice and text on Google Pay, the company said.