WGC plans to sell gold through India Post

The council initiates micro-finance scheme to promote investments by low-income groups.

The World Gold Council (WGC), an organisation funded by leading gold mines to increase gold demand, is in talks with the Indian postal department to sell the yellow metal through post offices.

It has also initiated a micro-finance scheme to promote gold purchases among the lower income groups.

The council intends to tap the vast network of over 1,50,000 post offices to encourage gold buying and investments in smaller towns.

Keyur Shah, associate director, World Gold Council, said, "The post offices offer services such as postal saving certificates and Indira Vikas Patra, popular saving schemes in small towns and rural areas. We intend to leverage this synergy to boost investments in gold, which is currently giving 35 per cent returns."

The demand for gold coins and bars is gaining importance in view of the escalating prices. The standard gold hit an all-time high of Rs 11,360 per 10 gram on Friday on the speculation of aggressive rate cuts by the US Federal Reserve and weakening dollar. The metal reached closer to the $900 in London.

WGC has initiated a micro-finance scheme to make gold affordable to the lower strata of the society. "Seventy per cent of the Indian population lives in rural areas and most of them are daily wage earners. The micro-finance scheme is designed to tap these people, who aspire for gold but don't have resources to buy the yellow metal."

Last year, the council started a pilot project in partnership with micro-finance firm Muthoot Pappachan to provide gold loans against jewellery to autorickshaw drivers in Kerala. The project attracted 2,000 registrations with an average purchase of 2-4 grams of gold.

Explaining the scheme, Shah said, "The council plans to target cluster groups such as auto drivers, farmers and teachers in small towns. It provides gold loans at affordable monthly installments while there is no penalty charged for the defaulters."

Recently, it rolled out the scheme in Andhra Pradesh and plans to tap the tribal belt of Tripura for the next phase of expansion. It aims to launch the scheme nation-wide in the next three-four years. WGC has taken a conscious stand to enter less affluent states or regions in an effort to reach the lower strata of the society.

The council is also exploring tie-ups with organisations to introduce corporate gold finance scheme to tap the working class.