Muthoot Finance Ltd. expects its housing finance’s asset under management to reach Rs 5,000 crore in three years.
“The segment has a portfolio of Rs 1,620 crore as on June 30,” Managing Director George Alexander Muthoot told BloombergQuint in an interaction. The company expects its microfinance AUM, which has a portfolio of Rs 1,300 crore, to reach Rs 1,900 crore by March, he said.
Key highlights from the interaction:
Gold Loans
- Witnessed muted growth in the last four to five quarters.
- Gold loans saw double-digit growth in the June quarter.
- Pick-up in economic activity over the last three months aided growth.
- Expect credit offtake in all branches across the country.
Gold Auctions
- Gold auctions have been less in the last two quarters.
- Have been trying to put in new methods and new systems where all customers are contacted and persuaded to pay and renew their loans; this is giving us good results compared to gold auctioning.
- Expect lesser auctioning in future for recovery of loans.
Digital Business For Gold Loans
- We are encouraging customers to go digital.
- Many customers now pay interest and also part of the principal physically.
- We have enabled for customers to take loans digitally 24/7.
- Several customers are paying interest and principal digitally.
Asset Quality
- NPAs of gold loan companies are of no consequence to losses.
- Recognition of NPA was only a lapse in time period of gold loan.
- Security for loans stood at 100 percent.
- Lower NPAs were due to IND-AS provision for segregating NPAs from other associated loans for a single customer.
Segment Growth
- Home finance has a portfolio of Rs 1,620 as on June 30.
- Will be allocating Rs 100-150 crore to both home finance and microfinance segments to meet capital adequacy ratios.
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Watch the full conversation here:
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