Indians Pawning the Family Gold Amid Credit Crunch
By Rajendra Jadhav and Nupur Anand
Thursday, August 22, 2019
Refused a loan by a state-run lender and desperate for funds to buy cotton seeds before the summer sowing season window closed, Indian farmer Babasaheb Mandlik ran out of choices -- he pawned his wife's gold jewelry.
Mandlik, who owns an 8-acre cotton farm in western India, pledged 70 grams of gold, almost all his wife's precious trinkets, in June in return for 150,000 rupees ($2,105).
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"Pawning the jewelry was a difficult decision as my wife likes to wear it at festivals and weddings," 50-year-old Mandlik told Reuters. "I convinced her that we didn't have any other option."
Mandlik is not alone. While pawning gold has long been an option for quick funds in a country that is the world's second-biggest consumer of the yellow metal, several lenders told Reuters of unprecedented demand as people struggle to secure loans from banks grappling with bad debt and a shadow lending industry stung by a liquidity crunch.
The trend, which has prompted some lenders to impose restrictions as risks and borrowing costs rise, has been accelerated by record gold prices. ...
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