Mahindra finance, the financial services arm of the multi crore financial arm of the Mahindra Group has launched a new product ‘Loan against gold' in Kerala.

MMFSL Vice-Chairman Uday Phadke said that the product has been designed so that customers are able to receive loans against gold ornaments. This way they will not have to sell their gold ornaments when they are in need of money.

The facility has been designed to be ideal for contingency requirements of customers and it effectively harnesses the potential of gold by transforming it into a productive asset, he said.

This has been the first ever loan branch opened by the company in Thodupuzha. It would open similar branches in eight to ten places in a year in the State, Mr. Phadke said.

He also said that the company is confident that it will win the trust of customers and play a leading role in shaping up this industry.

Ramesh Iyer, Managing Director, Mahindra & Mahindra Financial Services limited said that India was the first market for gold and thus growth potential of the gold industry is tremendous in India.

''India is the largest market for gold in the world and consequently the growth potential of the gold loan industry in the country was tremendous,'' he quoted.

He also said that apart from opening new branches in Kerala, the company would also look for widening its horizon to States like Maharashtra and Tamil Nadu.

A variety of loans would be offered by the company including small ticket loans, need-based loans and loans against pledge of gold jewellery, he added.

The interest on loans will vary from 11 to 14 per cent, he said.

The company has also recently joined the race for getting a banking license. Mahindra Finance has 450 branches in rural and semi urban areas of the country with over 5000 employees. Many top players like Bajaj, Aditya Birla Financial Services, Reliance Capital, Religare Enterprises and Indiabulls are eyeing the banking license.