CIBIL tracked stressed gold loan borrowers for 17 months after they took the loan.

44% had all their accounts closed. Gone from the formal credit system entirely.

For clean borrowers the same closure rate was 28%. So stressed borrowers exited at 1.6x the rate.

And among those who didn't close — more than one-third had only a gold loan remaining. Nothing else. One product. One lender. One thread left.

These borrowers didn't take a gold loan as a financial strategy. They took it to survive — to clear overdue EMIs, to reset, to buy time. And then either the gold loan got repaid and they stepped away from credit entirely, or it didn't and they lost the jewellery.

Either way, the formal system didn't rebuild them. It processed them and moved on.

We talk about gold loans as a financial inclusion story. For a section of borrowers, the data says otherwise.

Full breakdown