Running a girvi business is not complicated, but running it well — profitably, legally, and with minimal disputes — requires more than just having gold to lend. Here are 10 practical tips from successful Indian jewellers and money lenders.
Tip 1: Get Licensed Before You Start
The most common mistake is starting operations before obtaining the money lending license. Any loans given before licensing are legally unenforceable. The licensing process takes 4–12 weeks — start it before you open for girvi business.
For detailed guidance, read our guide on [Money Lending License in India](/blog/money-lending-license-india).
Tip 2: Always Lend at Maximum 75% LTV
Never lend more than 75% of a pledged item's current gold value. If you lend ₹90,000 against gold worth ₹1,00,000 and gold prices fall 15%, the item is now worth ₹85,000 — less than your loan. At 75% LTV, gold prices would need to fall more than 25% before you face a shortfall.
Tip 3: Collect Complete KYC for Every Loan — No Exceptions
Every loan, every customer, every time. Collect Aadhaar card, take a photograph, and get a signature on the loan agreement. It takes 5 minutes and protects you indefinitely.
Tip 4: Set Your Interest Rate and Communicate It Clearly
Tell the customer the interest rate clearly before the loan. Write the rate on the loan receipt: "2% per month" or "24% per year." When they repay, show them the calculation before asking for payment.
Tip 5: Build Your Recovery Process Before You Need It
**A basic recovery process:**
1. WhatsApp reminder 7 days before due date
2. Phone call on due date if not paid
3. Second call on day 3–7
4. Home visit or family contact on day 8–15
5. Formal written notice on day 16–30
6. Legal steps after day 30 if needed
Tip 6: Store Pledged Items with Maximum Security
•A quality locked safe rated for fire protection and burglary resistance
•Double lock — two people hold different keys
•CCTV covering the safe area
•Consider insurance for pledged gold
•Consider bank locker for very high-value items
Tip 7: Use Software from Day One — Not When You Are Overwhelmed
Starting with software from your very first loan means there is no migration challenge when you grow to 100 loans. The system builds naturally from day one.
Tip 8: Know Your Gold and Silver Rates Daily
Check the MCX gold rate every morning before opening. Update your loan amount calculations accordingly. During high volatility, be more conservative with LTV.
Tip 9: Build a Referral Network
The most profitable girvi businesses get significant new customers through referrals. Treat every transaction with fairness, resolve disputes quickly, and offer returning customers slightly better rates as a loyalty benefit.
Tip 10: Renew Your License on Time — Every Year
Set a calendar reminder 2 months before license expiry. Begin the renewal process 6 weeks before expiry. Operating with an expired license — even by a few days — is technically illegal.
For more guidance on starting and growing your girvi business, read our complete guide on [How to Start a Girvi Business in India](/blog/how-to-start-girvi-business-india).
Conclusion
A successful girvi business is built on legal compliance, fair customer treatment, sound risk management, and operational efficiency. None of these requires exceptional resources — they require consistent habits applied every day.