Microfinance institutions (MFIs) are increasingly turning to gold loans as their preferred lending strategy amid growing concerns over the risks associated with unsecured loans. With rising interest rates and economic uncertainties affecting repayment capacity among low-income borrowers, MFIs are seeking safer, collateral-backed alternatives. Gold loans, secured against the borrower’s jewellery, offer lower default risks and quicker disbursal, making them an attractive option. This strategic shift also reflects a broader trend of MFIs diversifying their portfolios to strengthen asset quality and maintain profitability in a volatile credit environment.