‘Micro’ gold loans in India – how long until the UK can borrow in gold?
Back in our piece titled “Quietly and behind the scenes gold is once again being recognised as money”, we pondered how long it would take before a high-street bank starts to offer loans in gold.
It would seem that the UK is well behind the curve on this one, with interesting news out of India today. First up, it’s fascinating to hear how gold is described thorough an Indian lens – a country that has a rich history of gold saving:
For many families in India, handing down gold in legacy to their daughters in the marriage has been a tradition long established and continues till date. Besides being a token of love, this tradition is bespoke of the power gold exudes in terms of prestige, honour and timely succour
But more importantly the article goes on to talk about a scheme backed, by the World Gold Council, that allows the 400m poorest people in India borrow and save in gold:
A typical daily wage earner either cannot afford to invest in gold or her socio-economic and family conditions do not allow her to do so
In recent years the World Gold Council has made funding more accessible by promoting gold loan schemes developed by microfinance institutions. These gold-linked micro-finance savings schemes help people at the bottom of the pyramid to save in gold.
World Gold Council claims to be acting as a catalyst to promote savings in gold by providing access to people at the bottom of the pyramid to credit facility provided by microfinance institutions.
Essential the ‘micro finance’ gold scheme works like this. A buyer with little rupees to their name can visit a micro fiance office and make a downpayment of 10-15% at the current gold price. Over the next year to three years the buyer makes monthly installments to pay of the balance – products are being offered on as little as 0.5g of gold.
Pretty amazing when you stop and think about it – the poorest in India are being actively encouraged and helped to save in gold whereas those in the UK are still being asked to trust the fiat paper system.
We stick by our predication that loans in gold will be coming to high-street bank in the UK in 2012.
Link to this article: : http://www.goldmadesimplenews.com/gold/%e2%80%98micro%e2%80%99-gold-loans-in-india-how-long-until-the-uk-can-borrow-in-gold-3271/