. The price of gold has been climbing in Nepal as well as in the international market lately. The price of gold has increased by setting new records every day, and its direct impact is seen among the general public as well as the businessmen. The number of customers taking loans against gold as collateral has increased significantly in banks and financial institutions.
According to the Federation TAG_OPEN_p_16 of Nepal Gold and Silver Dealers Association, the price of gold has reached an all-time high. Volatility in the international market, changes in the value of the US dollar, and global economic uncertainty have increased the trend of investing in gold.
Meanwhile, with the increase in prices, people have started opting to use the gold kept in their homes.TAG_OPEN_p_15 People have been taking loans with gold as collateral, especially for emergency expenses, business expansion, real estate purchases, and education and health needs.
Banks and financial institutions (BFIs) have also prioritized gold mortgage loan schemes.TAG_OPEN_p_14 Such loans have attracted customers because the process is simpler, faster and the interest rate is comparatively lower than other loans. Some banks have even provided minimal paperwork and faster approvals.
According to an official of a commercial bank, the demand for gold mortgage loans has increased by about 30-4 TAG_OPEN_p_13 0 percent in the recent period. Small and medium-sized businesses, in particular, are more attracted to it.
However, experts have advised caution.TAG_OPEN_p_12 Although it is easy to take loan due to the rise in the price of gold, there is a risk of the price falling in the future. If the price falls, they say, the price of the mortgage could fall and there could be more demand for mortgages, or the risk could increase.
On the other hand, with the rise in the price of gold, the number of customers buying jewelry has decreased, according to traders.TAG_OPEN_p_11 Even as weddings and festive seasons approach, customers seem to be in a wait-and-see mode. Overall, the rise in gold prices has attracted investors on the one hand and encouraged the general public to adopt new ways of financial management.
