Tag: Indel Money

Indel Money ties up with IndusInd Bank for gold loan co-lending partnership

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Indel Money has tied up with IndusInd Bank for a gold loan co-lending partnership to offer gold loans at competitive rates.

“Under the co-lending partnership agreement, Indel Money will originate and process gold loans based on mutually formulated credit parameters and eligibility criteria. The company will service customers through the entire lifecycle of the loans, including sourcing, documentation, collection and loan servicing,” it said in a statement.

IndusInd Bank will take into its book 80 per cent of the gold loans generated by the co-lending arrangement, while the remaining 20 per cent will be funded by Indel Money.

“The co-lending partnership places greater responsibility on us to excel in managing the gold loan lifecycle and underscores the trust and value that the bank has on our expertise and technology capability to meet unsolved credit needs of the underserved segments of borrowers. The partnership will help us serve an extensive range of customers across geographies and ticket-size,” said Umesh Mohanan, Executive Director and CEO, Indel Money.

The partnership will start on a pilot basis before expanding across the country.

Srinivas Bonam, Head of Inclusive Banking Group, Induslnd Bank said, “We are pleased to partner with Indel Money for extending gold loans. They have strong presence in the southern region with plans to expand across India.”

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IndusInd Bank inks gold loan co-lending pact with Indel Money, BFSI News, ET BFSI

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In what could be tagged as a maiden tie-up in the gold loan space, private sector lender IndusInd Bank has entered into a co-lending partnership with Kochi-based gold loan firm Indel Money. This is the first-of-its-kind conventional gold loan co-lending partnership between a gold-loan focused NBFC and a commercial bank, the Kochi firm, known for long-term loans against the yellow metal, said in a statement on Wednesday.

Under the tie-up, IndusInd Bank will offer gold loans at competitive rates to its customers, which will be originated by Indel Money, Umesh Mohanan, chief executive of Indel Money, said on Wednesday.

“We will originate and process gold loans based on mutually formulated credit parameters and eligibility criteria, under this co-lending partnership. We will also service the customers through the entire life-cycle of the loans, including sourcing, documentation, collection and loan servicing,” said Mohanan who is also the executive director of the diversified group.

The group is engaged in the car and two-wheeler retail, media and film production and EPC contracts.

While IndusInd Bank will take into its book 80 per cent of the gold loan generated by the co-lending arrangement, the remaining 20 per cent will be funded by Indel Money, Mohanan told PTI without disclosing how much incremental growth he expects in the AUM under this agreement.

The co-lending partnership as a pilot has been successfully running through this month and a national launch is expected shortly, he added.

Srinivas Bonam, head of inclusive banking at IndusInd Bank, said this collaboration is in line with the bank’s strategy to bring efficient and inclusive lending solutions.

Indel Money entered the gold loan market, which used to offer only up to three months tenor for a loan, offering up to two years loan. Even after many years, Indel is the only gold loan company offering two-year gold loans, even though others have also begun to offer up to one-year loans now.

Indel has a network of 191 branches spread across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana and Puducherry, and is on course to enter Orissa, Bengal and Maharashtra this fiscal, while Gujarat and Rajasthan next financial year. On the other hand, IndusInd has over 2,000 branches across 760 locations.

Indel closed FY21 with a live gold loan AUM of Rs 580 crore, up from Rs 336 crore in FY20 and is targetting Rs 850 crore AUM in the worst-case scenario and Rs 1,000 crore in the best scenario this fiscal, Mohanan had told PTI recently.

Indel, a part of the diversified Indel Corporation with over Rs 1,000 crore revenue last year, made a foray into gold loans in 2013, offering one-year-long loans against gold pledge first and then for two years in an industry that has never looked beyond three months after which they just auction and force-exit the customer.

The impact of its long-term loan offering forced entrenched biggies like the Muthoot groups and of late Manappuram Finance to follow the firm, moving away from their standard three months tenor.



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Indel Money plans to raise ₹150 crore via NCDs

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Indel Money plans to raise ₹150 crore of funds through secured and unsecured redeemable non- convertible debentures.

The issue includes a base issue size for ₹75 crore with an option to retain over subscription up to ₹75 crore aggregating up to ₹150 crore.

“The funds raised through this issue will be used for the purpose of onward lending, financing, and for repayment and prepayment of principal and interest on borrowings of the company (at least 75 per cent) and general corporate purposes (maximum of up to 25 per cent),” Indel Money said in a statement on Thursday.

The secured and unsecured NCDs come with the face value of ₹1,000 each. The issue opens on September 23 and closes on October 18 with an option of early closure in case of early over subscription.

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Indel Money charts out digital hybrid expansion mode

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With expectations of continued high demand for gold loans, Indel Money has adopted a digital-focussed hybrid model for its expansion, under which it has planned to open over 200 brick and mortar branches across the country by 2023-24.

“The expansion drive will feature the proliferation of its digitally-enabled doorstep gold loan facility parallel to the traditional brick-and-mortar framework,” the South India-based NBFC said in a statement on Monday.

Indel Money is also in talks to divest up to 15 per cent, as it charts out a faster growth trajectory by entering new geographies this fiscal and an eventual listing.

Also read: Indel Money launches special gold loan scheme for vaccinated citizens

“Our target would be to raise around ₹400 crore capital within the next two to three years. We hope to finalise the investor by December,” said Umesh Mohanan, Executive Director and CEO, Indel Money, adding that the NBFC is looking for PE investors.

At present, Indel Money has 191 physical branches in the States of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana and it aims to take the branch tally to 400 by 2023-24.

It also plans to open 50 branches in Odisha and Maharashtra in the fourth quarter of the fiscal and 45 branches in Gujarat and West Bengal in the first quarter of next fiscal.

To expand the doorstep gold loan facility which targets business owners and professionals looking for gold loans of ₹2 lakh and more, Indel Money will be following a hub and spoke model, ensuring superior service delivery, it further said.

Also read:Gold loan demand is expected to spike after lockdown: Indel Money CEO

The first pilot project of the doorstep gold loan facility has been successfully carried out in Bengaluru in January and the second phase of the pilot project will be underway in Hyderabad and Chennai in September.

“The hybrid model which combines both digitally-enabled doorstep gold loan and its hub in conventional brick and mortar format will help us penetrate major city markets like Mumbai, Ahmedabad, Patna, Chandigarh, Rajkot, Delhi, Lucknow. We are focusing more to set up branches in strategic locations capable of delivering more yields in terms of assets under management,” said Mohanan.

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Indel Money launches special gold loan scheme for vaccinated citizens

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To encourage vaccination against Covid-19, Indel Money has launched a special gold loan scheme with attractive interest rates for vaccinated citizens.

Indel Money IFC (Indel Money India Fight Against Corona) is offering a gold loan with a one year tenure, interest rate of 11.5 per cent, full loan to value and zero processing fee.

“Any existing Indel Money customer or any gold loan seeker who has received at least one vaccine dosage are eligible to avail the special gold loan scheme upon the submission of valid vaccination proof,” the South India-based NBFC said in a statement.

Umesh Mohanan, Executive Director and CEO, Indel Money said, “Vaccination is the vital step in strengthening the nationwide fight against Covid-19 pandemic and one of the ways to intensify the vaccination drive is to encourage more and more people to get vaccinated.”

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Gold loan demand is expected to spike after lockdown: Indel Money CEO

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Pledging of household gold is expected to go up across states with the gradual easing of lockdown restrictions, according to Umesh Mohanan, Executive Director and CEO, Indel Money, a Mumbai-based NBFC.

He says that customers are strapped for cash to honour committed outflows. The virus has been deadly this time with rising infection rate, caseloads and number of deaths, forcing people to borrow more. All these have added to the financial woes of the common people, he adds. Edited excerpts of an interview:

What is the outlook on gold loan for the current fiscal? And what will drive the growth of gold loans?

The outlook for gold loan demand is positive and the demand will be fuelled by healthcare requirements, pandemic-driven uncertainty, the limitations of the banking sector to serve gold loan demand at the earlier pace due to decreased gold prices and end of 90 per cent LTV lending on last March 2021, apart from increased credit crunch due to the prevailing policies.

Our gold loan book has registered around 40 per cent growth in FY20-21. We expect around 50 per cent plus growth in FY21-22, thanks to our expanded geographical presence.

Has there been growth in the gold loan business in April and May of FY22 compared to the same period last year?

The branches in locations with reduced restrictions on movements have witnessed larger pent-up demand in comparison to last year. The industry has been growing at over 25 per cent. Gold loan demand is expected to spike after the lockdown and the post-lockdown demand growth is expected to surpass growth registered during the post lockdown period last year.

Also read: Borrowers to get option to repay a part of the Gold (Metal) Loan in physical gold

Recently, gold loan NBFCs auctioned record tonnage of pledged gold through auctions. Does this point to the growing credit risks for firms offering short-term loans?

Truly, at this point when cash flow is constrained for the common consumer, the facility to keep their gold live by remitting interest and continuing at their original LTV would be a better option than the short-term loans. The consumers have to settle interest along with principal within a short period of time, and correspondingly re-pledge at relatively lower LTV. This will result in huge cash outflow for the customer, in comparison with the longer-tenure schemes.

What are your plans for the company?

We are planning to explore various options such as capital injection by the group holding company, raising funds through public NCDs and PE/VC placement for our expansion. We have recently opened 25 branches across Andhra Pradesh and Telangana. We also have plans to enter Maharashtra and Gujarat with our conventional brick-and-mortar format by Q4 FY21-22. We are also planning to set up a support hub in all major cities to spread our doorstep gold loan facility which functions through the network of virtual branches.

We are planning to launch pre-paid cards. Our disbursals are fully automated because of our tie-ups with banks through our app. Existing customers can use our portal or mobile app to extend the exposure of the gold pledged with us on the basis of the prevailing LTV.

We will set up an automated process in which customers can manage the credit line according to their preferences. We are also planning to expand our online gold loan facility to take the branches to the homes of customers as the upper segments of MSMEs are not comfortable visit gold loan company branches during the gold appraisal process.

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