Muthoot FinCorp to rely less on flagship gold loans
Muthoot FinCorp is looking to lessen its reliance on gold loans by lowering the share of its flagship business to 80% from 98% as part of a three-year diversification strategy, said managing director Shaji Varghese.
Varghese said the company is aspiring to become a full-stack financial services provider to lower to middle-income people. The lender is expanding its network of branches and plans to hire 4,000 people this fiscal for its new lines of business including MSME financing and offering loans against property (LAP).
«We are in a transition phase now. Traditionally, we have been a gold loan company. In the past, almost 98% of the revenue used to be from gold loans only. But now things are changing. We have taken a business strategy way forward that we would like to become a service provider of choice because we see a bigger opportunity in the lower to middle-income group,» Varghese said in an interview.
Muthoot FinCorp is also planning a public listing in two to three years though the plan has yet to be finalised. «We have not gone into a specific project plan because we have a lot of time to catch up on that. We don't have a definitive plan yet,» Varghese said.
Muthoot FinCorp had Rs20,487 crore of loan assets on a standalone basis including Rs18,000 crore worth of gold loans and the rest comprising loans against property and SME loans.
Varghese said the company is aiming to boost the share of earnings from non-gold verticals to 80% in 3-4 years from just 2% currently. «The intent is not to reduce gold
