Muthoot FinCorp plans to reduce the share of its gold loans

Muthoot FinCorp Ltd, the flagship company of the 137-year-old Muthoot Pappachan Group, plans to reduce the share of its gold loans to 70 percent from around 98 percent in the future, a top company executive said. Tuesday.

β€œIn the past, 98 percent of our revenue came from a single product: gold loans. Over the past twelve to eighteen months, we have grown our presence in gold loans and also added a number of functional specialties and capabilities to meet the life cycle demands of the customer,” said Shaji Varghese, CEO of Muthoot FinCorp.

β€œWe will continue to focus on gold loans. Just that the ratio of other companies will also grow. In the coming year we want to increase this to 80:20 and in the future to 70:30. Majority of the other businesses It will be SMEs and mortgage sector,” Varghese added.

During the last fiscal, the company reported highest ever loan disbursements, with consolidated disbursements of Rs 61,703.26 crore, up 18.60 percent. Assets under management (AUM) stood at Rs 33,359.30 crore with a net profit of Rs 1,047.98 crore, an increase of 62.12 percent over the previous financial year.

β€œA combination of gold loan growth, price hikes, doorstep services and diversification helped us improve the numbers during the financial year,” he said.

On its own, Muthoot FinCorp’s disbursements rose 15 percent year-on-year (year-on-year) to Rs 50,167.12 crore, compared to Rs 43,443.26 crore in the previous year. Profit after tax (PAT) rose 22.40 per cent to Rs 562.81 crore compared to Rs 459.81 crore in FY23.

Assets under management stood at Rs 21,349.85 crore, up 26.3 percent from Rs 16,910.67 crore in the corresponding previous year. Revenue was reported at Rs 1,197.31 crore in the January-March quarter of FY24, a growth of 25.59 percent compared to Rs 953.38 crore in the fourth quarter of FY23. As of March 31, 2024, the total number of customers served by Muthoot FinCorp stood at 4.29 million, an increase of 14 percent compared to the previous fiscal year.

β€œOur focused efforts to diversify our product range have effectively addressed the varied financial needs of our customers in the lower-middle income segment. Committed to continuous innovation, we are committed to developing a more comprehensive product range to support the changing financial needs of our customers. This approach has successfully expanded our customer base and strengthened our commitment to financial inclusion. As we look to FY25, we are excited about expanding our reach and enhancing our services to serve an even greater number of customers,” said the CEO. Thomas John Muthoot, Chairman of Muthoot FinCorp.

β€œAt Muthoot FinCorp, it was a landmark year crossing Rs 50,000 crore in disbursements in the last fiscal. We remain a retail service provider. Seventy-eight percent of our branches are in non-metro areas, bringing us closer to customers who have had limited access to formal financial services. Eighty-one percent of customers availed loans under Rs 1 lakh. We look forward to continuing to serve lower-middle income families and focus on financial inclusion, driven by our purpose to transform the lives of the common man by ensuring his financial well-being,” said Varghese.

First print: May 21, 2024 | 6:25 PM IST