Tag: Muthoot Fincorp

Gold loans shine the brightest in banks’ loan portfolio, BFSI News, ET BFSI

Banking & Finance

[ad_1]

Read More/Less


Gold loans have emerged as the fastest-growing major loan segment as people have pawned their jewellery and lenders look at avenues of low-risk growth. Outstanding loans against gold jewellery stood at Rs 62,926 crore as on August 27, up 66% on a year-on-year basis, according to the Reserve Bank of India (RBI) data.

Gold loans are often used to finance consumption spending, such as children’s education, weddings, illnesses or to meet household expenses during distress.

Public sector banks have also entered the segment to further grow their retail business. Despite regulatory arbitrage of higher loan-to-value lending in March 2021, banks have continued aggressively disburse gold loans.

Gold loans were up 1% on month in August 2021 as restrictions during COVID-19 eased and economic activities grew.

Loan demand picked up from the beginning of July as COVID-19 cases started declining. Gold loans via non-banking finance companies (NBFCs) had reported higher customer walk-ins.

LTV impact

However, gold loans have grown a mere 3.6% YTD, which is in contrast with the 54% CAGR seen in gold loan growth over the past two years.

RBI had raised the LTV of 90% on gold loans, which allowed banks to lend up to 90% of the value of the collateral.

However, it withdrew special allowance for banks from April 2021, impacting loan growth.

The average ticket size of loans that customers are opting for is Rs 55,000-60,000, which are rising for many lenders, showed growing signs of distress.

Gold loan NBFCs saw higher competition in the gold loan business last fiscal as banks grew their portfolio taking advantage of the special LIV allowance given to them by the RBI.

The expansion

With growth returning, gold financiers are now gearing up to tap the expected surge in gold loans.

Muthoot FinCorp has expanded its physical network by more than 100 new branches, mainly in the north, east and west regions of India, most of which were in rural and semi-urban areas. The NBFC had opened 70 branches in FY20.

Muthoot’s gold asset under management (AUM) grew at a compound annual growth rate of 12% between FY15 and FY20. In FY21, the portfolio grew 27%.

Pune-based Bajaj Finance has increased its gold loan branches from 480 to 700 in the last financial year and plans to add 100 plus branches this fiscal.

Its loan book grew 52% last year to Rs 2,300 crore, while it saw an increase in ticket sizes from Rs 75,000 to Rs 85,000 last year.

Shriram City Union Finance is also looking to ramp up its gold financing business this financial year, changing its strategy of focusing on other loan portfolios.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Gold loans sparkle again after second COVID-19 wave blip, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


Gold that lost shine after the Reserve Bank of India took away the loan-to-value (LTV) benefit for banks amid COVID restrictions in the second wave are sparkling again.

Gold loans were up 1% month on month in August 2021 as restrictions during the pandemic eased and economic activities grew.

Loan demand has picked up from the beginning of July as COVID-19 cases started declining. Gold loan non-banking finance companies (NBFCs) had reported higher customer walk-ins.

FILE PHOTO: Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019. REUTERS/Michael Dalder/File Photo

LTV impact

However, gold loans have grown a mere 3.6% year to date, which is in contrast with the 54% CAGR seen in gold loan growths over the past two years. Gold loan portfolios are up 66% year on year in August.

RBI had raised the LTV of 90% on gold loans, which allowed banks to lend up to 90% of the value of the collateral.

However, it withdrew the special allowance for banks from April 2021, impacting loan growth.

The average ticket size of loans that customers are opting for is Rs 55,000-60,000, which are rising for many lenders, showed growing signs of distress.

Gold loan NBFCs saw higher competition in the gold loan business last fiscal as banks grew their portfolio taking advantage of the special LIV allowance given to them by the RBI.

The expansion

With growth returning gold financiers are ow gearing up to tap the expected surge in gold loans.

Muthoot FinCorp has expanded its physical network by more than 100 new branches, mainly in the north, east and west regions of India, most of which were in rural and semi-urban areas. The NBFC had opened 70 branches in FY20.

Muthoot’s gold asset under management (AUM) grew at a compound annual growth rate of 12% between FY15 and FY20. In FY21, the portfolio grew 27%.

Pune-based Bajaj Finance has increased its gold loan branches from 480 to 700 in the last financial year and plans to add 100 plus branches this fiscal.

Its loan book grew 52% last year to Rs 2,300 crore while it saw an increase in ticket sizes from Rs 75,000 to Rs 85,000 last year.

Bengaluru-based Rupeek Fintech Private Ltd’s disbursals grew 2.5 times during the calendar year 2020. It has added its presence in 17 more cities, from 10 at the end of 2019.

Shriram City Union Finance is also looking to ramp up its gold financing business this financial year, changing its strategy of focusing on other loan portfolios.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , , , ,

Gold loan business shines as economic stress grows amid pandemic, BFSI News, ET BFSI

Personal Finance

[ad_1]

Read More/Less


If you have noticed retail shops and restaurants closing down in your locality and brightly lit jeweller’s shop opening in its place off late, there is a business booming in the middle of the pandemic.

While it is not about people flocking to buy gold, but pawning and selling gold in the time of widespread economic distress brought about by Covid.

It’s not just the local jewellers that are expanding, but the organised ones are on growth mode too.

What gives?

RBI data showed that at the end of FY21, the total value of gold loans outstanding was nearly Rs 60,500 crore — up 82% on the year.

Loan demand has picked up from the beginning of July as Covid-19 cases are declining and economic activities are on the upswing with many states easing restrictions. Gold loan non-banking finance companies (NBFCs) said customer walk-ins have increased during the month.

The average ticket size of loans that customers are opting for is Rs 55,000-60,000, which are rising for many lenders, showing growing signs of distress.

Gold loan NBFCs are seeing more competition in the gold loan business in the current financial year as the special allowance given by the Reserve Bank of India to banks to take an LTV (loan-to-value) exposure against gold loan was valid till March 31, 2021. Banks had witnessed a significant growth in gold loan business due to this special allowance. On the contrary, gold loan NBFCs are allowed an LTV exposure of 75%.

Gold auctions

Mannapuram Finance auctioned Rs 404 crore in the fourth quarter, which shot up to Rs 1,500 crore in the June quarter. The auctions happen when borrowers are unable to redeem their gold and the lenders auction it to recover their loans. Mannapuram had auctioned just Rs 8 crore worth of the yellow metal in the first three quarters of FY21.

Manappuram Finance sees business picking up in the second quarter of the fiscal with the gradual unlocking of the economy. It sees a slight decline in the portfolio in the first quarter before the pick-up.

The expansion

Muthoot FinCorp has expanded its physical network by more than 100 new branches, mainly in the north, east and west regions of India, most of which were in rural and semi-urban areas. The NBFC had opened 70 branches in FY20.

Muthoot’s gold asset under management (AUM) grew at a compound annual growth rate of 12% between FY15 and FY20. In FY21, the portfolio grew 27%.

Pune-based Bajaj Finance has increased its gold loan branches from 480 to 700 in the last financial year and plans to add 100 plus branches this fiscal.

Its loan book grew 52% last year to Rs 2,300 crore while it saw an increase in ticket sizes from Rs 75,000 to Rs 85,000 last year.

Bengaluru-based Rupeek Fintech Private Ltd’s disbursals grew 2.5 times during the calendar year 2020. It has added its presence in 17 more cities, from 10 at the end of 2019.

Shriram City Union Finance is also looking to ramp up its gold financing business this financial year, changing its strategy of focusing on other loan portfolios.



[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , , , ,

Muthoot FinCorp rolls out Aatmanirbhar Mahila Gold Loan scheme for women

Banking & Finance

[ad_1]

Read More/Less


Muthoot FinCorp has launched Aatmanirbhar Mahila Gold Loan – a unique and exclusive gold loan scheme for women. This is an extension of Muthoot FinCorp’s #RestartIndia Mission.

The AtmaNirbhar Mahila Gold Loan scheme was launched by actor Vidya Balan and the product offers maximum Loan to Gold value and lowest interest rate. This scheme is aimed at and is expected to be helpful to a large number of women who are currently dependent on local money lenders for their financial needs.

Muthoot FinCorp Shopping Dhamaka gets overwhelming response

Muthoot FinCorp employs more than 9,000 women staff across its 3,600+ branches all over the country. Women Muthootians, hence, felt the need to come out with a special scheme for the women of the country to make them self-reliant as they understood the problems of women better. The company has been able to positively transform more than 64 lakh women customers and every customer had a transformation story to share, a press release said.

ICRA upgrades long-term debt rating of Muthoot Finance to AA+

Vidya Balan said, “Empowering women has become the fundamental aim for all of us in not only helping them achieve their dreams but also transform and boost their entrepreneurial spirit. Women not only take on the responsibility of the house but also play a larger role in the economy and society. I am grateful to be supporting Muthoot Fincorp who has been a trailblazer in accelerating the financial inclusion of women that will positively impact the future”.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,

Muthoot FinCorp Shopping Dhamaka gets overwhelming response

Banking & Finance

[ad_1]

Read More/Less


Muthoot FinCorp Shopping Dhamaka, launched by the company as part of its RestartIndia programme, has directly benefited more than 25,000 shopkeepers in Kerala.

The company has been organising this campaign since August last year to help small retailers to overcome the business sluggishness due to Covid-19 as well as to increase footfalls in micro, nano, and small retailers and encourage consumers to do more shopping.

The company said in a statement that nearly 15 lakh consumers took part in the dhamaka. The company gave away prizes worth ₹6 lakh through the campaign including Honda Dio scooter, gold coins, LED TV’s and mobile phones.

The offer started on August 3, 2020, and will continue till February 6. Customers of those small-time retail shops registered in the Muthoot FinCorp Shopping Dhamaka were given gift coupons for purchases ranging from ₹100/₹500. Winners were chosen through a weekly draw of lots.

George Muthoot, Director, Muthoot FinCorp said that the company had started Restart India initiative to help small-time retailers. The project includes tailor made loan schemes, advisory services, and demand generation programmes such as digital market traning and shopping Dhamaka.

Given the overwhelming response from retailers and customers, the company plans to take the programme to other states in phases, he said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , ,

Muthoot Fincorp launches NCDs to raise ₹200 cr

Banking & Finance

[ad_1]

Read More/Less


Muthoot Fincorp, flagship company of Muthoot Pappachan Group (known as Muthoot Blue), on Friday launched its eighth public issue of secured and unsecured redeemable non-convertible debentures (NCDs) to raise ₹200 crore with an option to retain over subscription up to ₹200 crore, aggregating to ₹400 crore.

The funds raised will primarily be used to augment the working capital and requisite lending, said Thomas John Muthoot, Chairman, Muthoot Pappachan Group, and Managing Director, Muthoot Fincorp.

Board approval

The company has received board approval to raise NCDs through public issue in the aggregate amount of up to ₹1,500 crore. The first tranche of the issue with a face value of ₹1,000 each and minimum ticket size of ₹10,000 (10 NCDs), had opened on September 28, 2020 and closed on October 23, 2020.

Also read: Muthoot Finance to raise ₹1,000 crore through NCDs

“The second tranche of the issue with the face value of ₹1,000 and a minimum ticket size of ₹10,000 (10 NCDs) opens now and is scheduled to close on January 25, with an option of early closure or extension in compliance to SEBI debt regulations,” Thomas John Muthoot said.

Demand for gold, MSME loans

There will be nine options with tenure options of 27 months, 38 months and 60 months for the secured NCDs, and a tenure option of 72 months for the unsecured NCDs, offering returns with interest rates ranging from 8.25 per cent to 9.40 per cent. The issue has received credit rating ‘CRISIL A/Stable’ from Crisil.

“Muthoot Fincorp has a diversified portfolio of products that is responsibly designed to empower our customers for their lifecycle needs. In the prevailing market conditions, especially when Indian economy is restarting, we have been experiencing a spike in demand for gold and MSME loans,” Thomas John Muthoot pointed out.

Working capital needs

“In order to enable nano, micro, and small businesses, our target customers, rebound, the company needs the infusion of more working capital and hence the decision to go for an NCD issue. The first tranche was received well by our investors, and we managed to raise ₹397.14 crore,” he said.

Also read: Muthoot Finance to be added to MSCI India domestic index

Muthoot Fincorp, along with sister companies, has lakhs of customers actively engaged with it on a day-to-day basis. “We are confident about the success of this NCD issue, and hope that this will further fuel growth in the economy and add more value to stakeholders, including our investors,” Thomas John Muthoot added.

[ad_2]

CLICK HERE TO APPLY

Leave a comment , , , , ,