Non-banking finance companies (NBFC) hope that the much-expected revival of the economy, which they believe would be made possible by the new Government, would give a big boost to the sector.
“The NBFCs, particularly gold loan companies, will be among the beneficiaries of the new policy orientation of the Modi Government,” according to KP Padmakumar, Executive Director of Muthoot Finance, one of India’s leading gold loan companies. Padmakumar told Business Line that the new Government will be keen on clearing the huge pile of projects.
The fall in the price of gold, the lowering of the percentage of value of gold that could be loaned by gold loan companies and the restrictions on raising funds by the companies have hit gold loan firms hard. Muthoot had lost business of more than ₹5,000 crore in the last financial year.
Padmakumar said Muthoot Finance is currently on a restructuring mode. “For the first time, we are going to deploy a sales team to aggressively sell our services,” he said. “We are certain we will recover our lost business before the financial year runs out,” he added.