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Cholamandalam Investment and Finance Company Ltd (CIFCL), part of the Murugappa group, is set to foray into gold loan business, beginning with a pilot in Andhra Pradesh, Tamil Nadu and Kerala, which account for 40 per cent of the gold loan market.

According to Arul Selvan, senior vice president and CFO, CIFCL, the company’s board has given its in-principle approval for the proposed entry. “We are starting the business as a pilot. After 6-7 months, based on the outcome, we will scale it up including setting up exclusive branches for gold lending,” he said.

It would focus on the Rs 30,000-50,000 income bracket, and would lend up to 75-80 per cent of the value, Selvan said.