Gold Pawn Loans Surge 54% in Sri Lanka Amid Economic Crisis

In Sri Lanka, a striking 54% increase in loans secured by pawning gold jewelry has been reported, pushing the total amount to Rs 101.1 billion by March this year. This surge, amounting to Rs 351.45 billion, highlights the severe economic pressures faced by citizens. Professor Wasantha Athukorala from the University of Peradeniya's Department of Economics and Statistics noted that daily needs driven by economic inflation are the main cause for this trend.

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The amount of loans taken by pawning gold jewelry from commercial banks has increased by approximately Rs 351.45 billion.

Commercial banks saw gold-backed loans rise from Rs 66 billion in 2024 to Rs 101.1 billion by March of the current year. This dramatic increase indicates a widespread reliance on gold as a financial resource during the ongoing economic crisis. The situation has led to a significant depletion of household assets, with financial institutions reporting that over 60% of Sri Lankan homes are now without gold jewelry due to pawning or sales.

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This is an increase of about fifty-four percent.

Further exacerbating the situation, global market fluctuations and the depreciation of the Sri Lankan rupee have driven gold prices to record highs. This has incentivized many to sell their gold. Reports suggest that during the economic crisis, gold pawning alone increased by Rs 356 billion. While official statistics on the exact amount of gold sold are not published, the trend underscores the depth of the financial hardship affecting the population.

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The amount of loans taken by pawning gold jewelry from commercial banks was Rs 66 billion in 2024.