Starting a girvi business in India is one of the most accessible business opportunities available to jewellers and entrepreneurs. With India holding an estimated 25,000 tonnes of privately owned gold, the demand for gold-backed lending is massive and consistent throughout the year.
This guide covers everything you need to start a girvi business — from legal requirements and startup costs to daily operations and growth strategies.
Understanding the Girvi Business Model
A girvi business earns income by charging interest on loans given against pledged gold and silver. Here is the basic economics:
•You lend ₹50,000 against pledged gold worth ₹70,000
•You charge 2% interest per month
•After 6 months, the customer repays ₹56,000 (₹50,000 principal + ₹6,000 interest)
•Your return on that loan: 12% in 6 months, or 24% annualised
With a portfolio of 50 active loans averaging ₹30,000 each (total portfolio of ₹15 lakh), monthly interest income at 2% would be ₹30,000 per month. This scales directly with your loan portfolio size.
Step 1 — Legal Requirements
**Business Registration**
Register your business before starting operations. Options include:
•Sole proprietorship — simplest, least paperwork, suitable for small individual operations
•Partnership firm — if starting with a partner
•Private limited company — for larger operations with multiple investors
Registration cost: ₹1,000–₹5,000 depending on the structure and whether you use a CA or chartered secretary.
**Money Lending License**
This is the most important requirement. Every state in India has a Money Lenders Act that requires formal licensing for lending businesses. Operating without a license is illegal and can result in penalties.
Documents generally required:
•Application form (available at the district office or official portal)
•Proof of identity (Aadhaar, PAN)
•Proof of business address
•Character certificate from local authorities
•Proof of capital (bank statements)
•Recent passport photographs
•Payment of license fee (₹500–₹5,000 depending on state)
Processing time is typically 2–8 weeks. For detailed state-specific guidance, read our complete guide on [Money Lending License in India](/blog/money-lending-license-india).
Step 2 — Initial Setup Costs
| Item | Estimated Cost |
|------|----------------|
| Shop deposit and first month rent (Tier 2 city) | ₹30,000–₹1,00,000 |
| Shop furnishing and counter | ₹20,000–₹50,000 |
| Safe/locker for pledged items | ₹15,000–₹60,000 |
| Gold testing equipment | ₹2,000–₹50,000 |
| Digital weighing scale | ₹3,000–₹8,000 |
| Business registration and license | ₹5,000–₹15,000 |
| Loan management software | ₹0–₹2,000/month |
| Initial lending capital | ₹2,00,000–₹10,00,000+ |
Total setup cost (excluding lending capital): approximately ₹75,000–₹3,00,000 depending on location and scale.
Step 3 — Essential Equipment
**Gold Testing Equipment:** Start with an acid test kit (₹1,500–₹3,000) or electronic gold tester (₹8,000–₹25,000). XRF analysers (₹50,000+) are most accurate for larger operations.
**Digital Weighing Scale:** A precise legal-for-trade scale accurate to 0.01 grams. Cost: ₹3,000–₹8,000.
**Safe or Locker:** A quality safe with fire and theft protection costs ₹15,000–₹60,000 depending on size.
Step 4 — Setting Your Interest Rates
Interest rates for local girvi businesses typically range from 1.5% to 3% per month. Starting at 2% per month (24% per year) is common for most markets.
Step 5 — Customer KYC Requirements
For every loan, collect:
•Government photo ID (Aadhaar card is most common)
•Address proof (if different from Aadhaar)
•Mobile number
•Photograph
Step 6 — Record Keeping
From day one, use proper record keeping. Digital loan management software like SthirApp makes record keeping simple and ensures you are always audit-ready.
Read our guide on [Digital Bahi Khata for Jewellers](/blog/digital-bahi-khata-for-jewellers) for more on digital record keeping.
Conclusion
Starting a girvi business in India requires modest initial investment and the demand is consistent and growing. The critical success factors are: proper licensing, accurate gold assessment, secure storage, fair interest rates, and professional record keeping from day one.