April 14 report on National Public Radio by Julie McCarthy illuminated
a phenomenon that is often described but rarely humanized: India’s
obsession with gold.
China may have out purchased India in 2013 to become the world’s top
gold consumer — the two countries together contributed more than 50
percent of the global physical gold demand in 2013 — private gold
ownership is central to India's culture.
women, owning gold has provided individual security. At Indian
weddings, brides often receive gifts of gold — traditionally in the
form of jewelry — to provide good fortune to the bride.
Indian women, gold jewelry serves multiple purposes: objects of
adornment, a form of security against life's changes, and a store of
savings and wealth. NPR's story estimated in the report that Indian
households control an estimated $600 billion to $800 billion worth of
gold (or, four times the U.S. reserves in Fort Knox).
gold in India is increasingly being used for a more concrete purpose:
It is being pledged to secure loans for individuals who don't have
access to traditional credit sources. For example, Muthoot Finance has
4,000 branches throughout India and transacts the equivalent of more
than $50 million in gold loans per day. Its interest rates of 12 to 24
percent are comparable to U.S. credit card rates.
loans challenge a traditional view of gold as an idle asset, or
something that one puts under his or her bed as a sort of rainy day
fund. Especially in an economy where individuals don’t have access to
bank accounts or formal credit, the expanded use of gold in India to
help individuals build their lives is something to watch from both a
humanist and an economic lens.