Riding on a steak of consistent growth in the last few years, Kerala-based NBFC Muthoottu Mini Financiers is aiming to close FY23 with an AUM (assets under management) of ₹4,000 crore. The company has posted a 21 per cent growth in AUM during FY 2019-20, 18 per cent in FY21 and 25 per cent in FY22.

Mathew Muthoottu, Managing Director, Muthoottu Mini Financiers, cited several factors that contributed for the growth since 2018 ranging from adoption of per branch AUM and penetrating the market to reach out to more customers to starting of zonal offices that has helped the company focus more on business.

Above all, a change of track from issuing NCD (non-conventional debentures) to gold loans seems to have helped consolidate the AUM, Mathew told BusinessLine CARE Ratings has recently upgraded the NBFC’s credit rating to A- (Stable) from BBB+

Expansion strategy

The company has chalked out an aggressive expansion plan to take the total number of branches to 1,000 by the end of 2023 from the current network of 830, which is expected to create more jobs. Normally, a single branch is manned by four persons. 

“We are on track to expand both vertically and horizontally by increasing the number of branches without losing focus on the yield and performance of existing branches,” he said.

This year, the company is planning to achieve the target by categorising branches with a minimum per-branch gold loan AUM of ₹3 crore to ₹25 crore depending on the potential of a branche.

“We are well on our way to becoming the most preferred and one-stop financial services provider for the common man across the country,” he said.

On the impact of inflation on business, the Managing Director said gold loans have a moving market always and the off take of loans will be more during the time of uncertainties.

Gold loan business

To a question on the competitive environment in the gold loan business, he said Covid situation had brought in more players and scope for expansion. Quoting reports, he pointed out that total gold loan business in India is estimated at ₹13 lakh crore and only 35 per cent was in the hands of the organised segment and the remaining in the unorganised sector, comprising private money lenders.

“We are focussing on the business from the unorganised segment. Our average ticket size is around ₹50,000 compared to ₹2-3 lakh offered by banks,” he said.

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