World Gold Council to launch microfinance initiative in AP

The World Gold Council (WGC), a not-for-profit association formed by over 27 leading gold producers across the world with the sole objective of promoting the use of the yellow metal through marketing and research, is planning to introduce its microfinance initiative in Andhra Pradesh soon.

"The idea is to provide loans, in collaboration with microfinance institutions (MFIs), to lower income groups that don't have the purchasing power to buy gold upfront," Keyur Shah, associate director, WGC, told mediapersons here on Wednesday

WGC is already in talks two MFIs in Andhra Pradesh, and plans to roll out the scheme in the hinterlands of the state by March 2008, and replicate the model across the country in the next two years, he added.

The council, in partnership with the Muthoot Pappachan Group, had already launched the project in Kerala. The scheme is designed to protect the price of gold prevailing at the time of an initial payment, and the metal would be handed over to the beneficiary after completion of his EMIs at the same protected price.

As part of WGC's endeavour to promote physical gold as a good savings instrument with significant return on investment, an age-old culture that has been ingrained in the country, Shah said the council was focusing more on keeping youth involved with gold.

"Gold consumption by young girls in the country is meagre and we intend to promote the precious metal among the younger generation through branded jewellery, which is not only trendy, but suits their pockets," Shah said.

WGC sells its brand 'Collection G' in collaboration with Tanisq and Italian designer collection 'Gold Expression' with D'Damas, among others.

Currently, India ranks first in gold consumption in the world, with an annual growth rate of 20 per cent. Last year, around 721 tonne of gold was consumed, of which 195 tonne went into retail investment (bars and coins), while the remaining 526 tonne was used for jewellery.