NBFC Muthoot Finance said the demand for gold loan is constantly increasing. Managing Director George Alexander Muthoot told FE the company is adding new clients to its gold lending business daily, with small businesses and traders preferring a quick loan.
“We have a 2-3 crore customer base, and at this point we have over 60 lakh active loan accounts. The number of people who take out a loan each day is greater than the number of people who close a loan account. The number of active customers has been increasing for three or four months. Our quick loans are helping a lot of people restart their businesses, ”he said.
Muthoot said its gold lending business is expected to grow by more than 15% over the next three years.
He said raising capital for business expansion has become easy and additional borrowing rates are expected to come down. The average yield of the NBFC is 19% and it is likely to decline with the fall in the cost of funds.
Muthoot quit his white label ATM business in December 2020 because the company was not making any money. He said digital transactions are on the rise and more than 60% of customers are doing digital transactions.
The company, which also operates mortgage, microfinance and insurance brokerage subsidiaries, plans to open 150 to 200 branches per year, adding to its 5,330 existing branches.