A UAE-based asset management firm plans to raise up to $50 million to support an Indian FinTech firm’s gold-backed private credit strategy as part of its business expansion plans.
Aditum Investment Management, based at Dubai International Financial Centre, will raise about $25 million from investors in the first tranche for Wizz Financial’s gold lending programme in India, Manoj Mahadev, Aditum's head of investments told The National.
The first tranche is expected to close by December 10, with the second $25 million to be raised in the first quarter of 2026.
“We are targeting institutional investors and regular investors from the region to invest in the fund, which will specifically support gold loan business of Wizz Financial. There is a lot of interest among investors,” Mr Mahadev said.
Aditum has more than $9.68 billion in assets under management, serving institutional investors and wealth managers across the Gulf region.
Wizz Financial specialises in offering services including foreign exchange, remittances and gold-backed loan programmes through its unit Unimoni. It operates more than 300 Unimoni branches across India.
The company was founded by UAE-based entrepreneur Amir Nagammy in partnership with Abu Dhabi Capital Group, a private investment company.
Mr Mahadev expects good returns for investors as gold lending is expected to grow in India.
The gold loan market in Asia's third-largest economy is expected to double to $161.56 billion by 2028-29 from the 2023-24 financial year, according to a PwC report cited by Aditum.
“There are two things happening in India. The amount of gold that is held with Indians is large, it will be 25,000 tonnes-plus,” Mr Mahadev said. “And gold prices are elevated, which means people have to pledge less to borrow. So gold lending is expected to grow substantially.”
India's demand for gold was 747 tonnes in 2023, making the country the second-largest consumer of gold globally, after China, Aditum said. Gold represents 45 per cent of a household’s financial assets, at $3.3 trillion, which highlights its significance in the Indian economy.
Wizz Financial's customers include entrepreneurs and farmers and its products mainly target rural India.
“People prefer to work with a small NBFC (non-banking financial company) like ourselves, rather than give the gold to a very big bank that sends it to a centralised place where they cannot check that the gold is there,” Mr Nagammy said.
“Our relationship with customers is personal. First of all, we are always there, we are regulated, We also make sure that our customers don't default. Our default rate in the last three years is zero, where the average in the market is about 1.5 to 2 per cent.”
Apart from gold-backed lending, the company provides services such as insurance and UPI (Unified Payments Interface), connecting customers with banks for instant payments through mobile phones.
“In a rural area of India, sometimes our branches are like a financial hub supermarket for the villagers, for the farmers, to provide them [with] a lot of financial services, not only for the gold,” Mr Nagammy said. “We do a lot of education loans, travel, so people feel more comfortable coming to our branches because we provide them [with] many products.”
Wizz Financial provides lending starting from 25,000 rupees ($280) to a maximum of 500,000 rupees. Customers deposit gold with the company for eight to nine months and reclaim it after repaying the loan.
The Indian economy is projected to grow 6.6 per cent this year, after expanding by 6.5 per cent last year. It is forecast to grow by 6.2 per cent next year, according to International Monetary Fund's latest report.
