CHENNAI: Kerala-based Muthoot Finance has ventured into big-ticket loans segment (loans above Rs 10 lakh) and hopes to grow by 10-12 per cent by year-end.
“Our gold loan portfolio, today, stands at 95 per cent of our AUM at Rs 27,000 crore. We plan to grow by 10-12 per cent in the next year to Rs 30,000 crore,” K R Bijimon, chief general manager of Muthoot Finance, said here on Friday.
The gold financing company had recently launched a new loan scheme to target small and medium enterprises for their working capital requirements or investment needs.
Under the scheme, the NBFC offers gold loans above Rs 10 lakh at an interest rate of 12 per annum. This interest rate, Bijimon says, is much more attractive compared to the prevailing rates of 14-15 per cent offered by banks. In addition, the company offers a five per cent cash back on the new scheme. So far, the company has already given 1,000 loans and disbursed over 100 crore.
Referring to the company’s aggressive plans to tap the market with this new scheme, he said, “We are particularly looking to penetrate the south Indian markets as we believe Tamil Nadu alone has over 5,000 tonnes of gold, which can serve more small businesses.” This loan will now be available through all 4,200 branches, which include 942 in Tamil Nadu.The firm’s market share in south India is 55 per cent, of which Tamil Nadu contributes a big chunk of 25 per cent.
The company’s assets under management (AuM) in Tamil Nadu stands at Rs 4,804 crore in the first half of FY18. “In 2013, when we were beginning our expansion plans to North India, our AUM was around Rs 8,000 crore. We are now bouncing back and we are looking to regain the market in two years,” he added.
During the year, the company increased its shareholding in the Sri Lankan subsidiary--Asia Asset Finance Plc .