The business, controlled by India’s billionaire Muthoot family, has been gaining momentum as customers use their jewelry to secure short-term loans, capitalizing on the surge in prices.
This has lifted the company’s share price and pushed the family’s combined net worth above $13 billion, with several members seeing their wealth double in the last three years, as reported by Bloomberg. Forbes last year ranked them the 23rd richest in India.
At Muthoot, customers bring in gold jewelry, which is then assessed for purity before a loan is issued for as much as 75% of the piece’s value. The gold must have a minimum purity of 18 karats.
“Gold loans are given only against household ornaments, not against bullion or biscuits,” George Alexander Muthoot, 70, the company’s managing director and one of its third-generation executives, told Indian magazine The Week.
George Alexander Muthoot, Muthoot’s managing director. Photo from the company’s website |
Employees are trained to evaluate jewelry, and borrowers are not charged for the appraisal or safekeeping of their gold. Loans typically run for four to 12 months with interest rates of 1-1.5% a month. Customers recover their jewelry upon repayment.
Muthoot Finance was holding 209 metric tons of the yellow metal on behalf of clients as of late November 2025, more than the amount held in Singapore’s official foreign reserves at just over 204 tons as of the third quarter of last year.
The business traces its origins to 1887, when it was established by Muthoot Ninan Mathai. The early business centered on trading timber and food grains. Its logo, featuring two elephants facing each other, reflects the herd that the family once used to log timber.
Leadership later passed to his son, who steered the firm into finance in 1939 by launching a chit fund, a traditional local savings arrangement. As the business expanded into lending backed by gold jewelry, it was rebranded as Muthoot Bankers and later to its current name.
While small jewelers had provided short-term credit to customers in need long before this, the sector was largely avoided by India’s state-owned banks due to the risks of counterfeit gold.
“Gold-pawning may be a hoary trade, but we take the credit for making it an organized business and giving it respectability,” M.G. George Muthoot, another third-generation executive who led the company’s expansion beyond southern India, once told Forbes Asia.
M.G. George died in 2021 at the age of 71. He had served as group head and was the eldest among the third-generation brothers who continue to run the family enterprise today.
In India, gold plays an important role in the local culture and is closely tied to religious rites and traditions. Indians are obsessed with the metal, with households’ holding amounting to around 34,600 tons worth about $3.8 trillion, as estimated by Morgan Stanley.
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A gold jewelry shop in Sulthan Bathery, Kerala, India. Photo by Hemis via AFP |
This deep-rooted affinity has played to Muthoot Finance’s advantage, turning gold loans into a boon for the company.
“People are using it as a quick and easy means for finance,” George Alexander said. “There is lot more visibility than earlier now because gold prices are also going up.”
He added that the long-held perception of these loans as a sign of distress has also eased.
Sandarsh, a 27-year-old driver in Bengaluru, said borrowing from Muthoot is much easier than elsewhere. He told Bloomberg that when he took out a loan of about 500,000 rupees in 2023, the rate he was charged, at 1.25% a month, was lower than that offered by the State Bank of India.
Meanwhile, builder Sayed Nazrullah told Business Today that he often turns to Muthoot when he needs to make cash payments, saying he feels safer keeping his jewelry there than with other pawnbrokers, who he said look for any opportunity to sell it off.
Although many of its customers are low-income earners, defaults are uncommon. Muthoot’s non-performing loan ratio of 2.3% is comparable to those of commercial banks, even though lenders like Muthoot operate under looser regulations. Jewelry seized from any default loans is also auctioned off.
Observers say the low default rate reflects the firm’s policy of accepting only gold jewelry. For many families, such pieces carry deep emotional value, creating an incentive to repay and reclaim them.
But the firm still faces risks of stolen or fake gold, staff fraud and burglary despite having safeguards in place.
And while rising metal prices have translated to larger loans and higher interest income, Muthoot’s competitors are also catching up.
Nonetheless, George Alexander believes that the market is expanding and that operational challenges will eventually confront the firm’s rivals as well.
Muthoot Finance plans to grow its network of more than 7,500 branches by up to 200 outlets a year. Behind the scenes, the family is already preparing the next generation to continue the business.
Reflecting on the firm’s earlier years, George Alexander said the firm initially struggled to win trust and had to run campaigns to reassure customers that it was safe to keep their jewelry at Muthoot.
“Eventually, we were able to convince people,” he said. “Today, even those in the upper layer of society, not just the lower middle class or the poor, are using gold for a quick bridge finance.”
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