According to Managing Director George Alexander Muthoot in an exclusive interview on November 13, Muthoot Finance, a Kochi-based non-banking financial company (NBFC), expects to raise its non-gold loan book by up to 20% in the next five years.
"As a result, non-gold loans now account for 13% of our total book." "It could rise to 20% in the next five years as we gradually and steadily expand our non-gold loan book," he added. Muthoot Finance is one of India's largest gold loan NBFCs.
Muthoot Finance's gold loan AUM increased by 20% year on year in the second quarter of FY24 and by 9% in the first half of FY24, hitting Rs 67,517 crore. In FY24, Muthoot estimates a 15% increase in AUM in both gold and non-gold assets. Muthoot Finance advanced Rs 8,109 crore in gold loans to new customers in the first half of FY24.
"Our non-gold loan businesses in subsidiaries continue to do well, with disbursements during the first half of the year increasing by 76 percent to Rs 4,294 crore in the microfinance business and by 164 percent to Rs 278 crore in the housing finance business," said the chief executive officer of the company.
Muthoot Finance's overall revenue from the insurance brokerage industry increased by 85 percent to Rs 47 crore in the first half of the year. He also added that Muthoot is focusing on both physical and digital expansion.
"The RBI has granted us permission to open 174 branches this fiscal year." We've already opened about 60, and the remainder will follow in the next 3-4 months. "We have already opened 116 branches in FY23," Muthoot Finance's MD noted.
"We encourage our customers to repay loans and pay interest electronically." To promise their gold, customers must bring it to our branch. When he visits the branch, he completes the rest of the work online. If he also wants the gold, he must travel to the branch. "That's the only physical contact we've had," he says.
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According to George Alexander Muthoot, the NBFC has requested permission from the regulator to accept deposits. Deposits are permitted for 14 of the top-tier NBFCs.
There are three layers of NBFCs: the base layer, the middle layer, and the upper layer. The intermediate category includes all deposit-taking and non-deposit-taking NBFCs with assets above Rs 1,000 crore. The higher category includes NBFCs that the RBI has specifically classified as requiring additional regulatory requirements based on a set of benchmarks and scoring system.
"Four or five of us have represented the government to permit us to take deposits because we have to diversify our funding source also," he went on to explain. "The deposit scheme is extremely beneficial to both us and the depositors." "As a result, we have included a Budget suggestion in this regard," Muthoot Finance's MD explained.
