First, a licence has to be obtained for carrying on money lending business under the Kerala Money lenders Act 1958. It has prescribed certain regulations like maximum interest rate chargeable , books of accounts to be maintained, not to intimidate borrowers etc.
If a shop/office has to be opened then necessary sanction to be obtained from the local self government authority like Panchayat, municipality etc.
If the gold pledged is to be kept in the office premises necessary security and insurance has to be taken care of.
To protect the business necessary documents have to be obtained and duly stamped for any need of filing case in future. The main business risk is that of spurious jewels or spurious gold given as security. It really needs an experienced gold appraiser to distinguish between low purity gold and good purity gold. Good amount of capital also is needed to keep rotating and a good monitoring to recover periodical interest and redemption and receiving back the loaned amount.
The best way to know more practical details is to consult a person who is already in the business,