The gold loan business has amassed billions of dollars in wealth for families like the Muthoot and Manappuram companies. Both companies hold a total of 273 tons of gold as collateral. Gold has built a business worth billions.

Gold loans have increased wealth by billions.

In India, gold is often considered a saving grace for hard times, but it has created billions of dollars in wealth for two Indian families. Their extensive gold loan business has made Muthoot Finance and Manappuram Finance among the country's largest gold loan companies. The families behind these companies now have wealth worth billions of dollars.

George Alexander Muthoot of Muthoot Finance and his family have a net worth of approximately $9.9 billion. Meanwhile, V.P. Nandakumar, chairman of Manappuram Finance, has a net worth of approximately $1.4 billion. The gold loan business has played a significant role in the significant growth of both their wealth.

The Muthoot family business began in 1887.

The Muthoot family's business began in Kerala in 1887. Muthoot Ninan Mathai opened a grocery store at the time. Later, the family began lending money to farmers and estate workers through chit funds.

In 1939, the family began lending against gold. Nearly 40 years later, the business was divided among three brothers. The eldest son, Mathai George Muthoot, continued to grow the lending company that later became Muthoot Finance.

Today, Muthoot Finance is India's largest gold loan company. The company holds approximately 210 tons of gold as collateral. By June, its gold loan business had quadrupled to approximately $18.5 billion compared to 2020. It has approximately 3 million customers.

Manappuram also changed business.

V.P. Nandakumar, chairman of Manappuram Finance, started his career by managing his father's mortgage and money lending business. At the age of 32, he took over the business in Valapad, Kerala. Five or six years later, around 1990, the company was listed on the stock exchange.

Later, the company began focusing more on gold loans. In 2007, Nandkumar, with the help of ICRA, estimated the gold held by Indian households. According to the report, Indian households owned approximately 18,000 to 25,000 tons of gold. Subsequently, the company made gold loans a core part of its business and raised $14 million in funding from Sequoia Capital.

Today, Manappuram operates in areas such as microfinance, housing finance, business, and car loans. Muthoot, meanwhile, has expanded its business into mortgages, IT, energy, real estate, education, healthcare, and hospitality. However, gold loans remain the core of both companies' businesses.