National News
Muthoot Microfin to start gold loans soon
Muthoot Microfin, part of the Muthoot Pappachan Group, is entering secured lending, including gold loans via co-lending with Muthoot Fincorp, leveraging RBI’s eased qualifying asset norms. The move aims to diversify its ₹12,253 crore AUM and reduce concentration risk
Muthoot Microfin, leveraging relaxed RBI norms, is diversifying into secured lending, including gold loans via co-lending with Muthoot Fincorp. Muthoot Microfin, a part of the Kerala-based Muthoot Pappachan group, is diversifying into secured lending, taking advantage of the easier qualifying asset criteria set by the Reserve Bank of India.
The NBFC-MFI, with Rs 12,253 crore assets under management at the end of June, is all set to foray into gold loans through a co-lending arrangement with its parent, Muthoot Fincorp.
As part of the risk mitigation exercise, the lender also began micro loans against property (LAP) and micro business loans a couple of months ago.
In terms of qualifying asset rules, Muthoot Microfin’s share of microfinance loans given to borrowers with up to Rs 3 lakh annual family income stood at 76%. About 94% of its AUM was given without collateral, while the balance 6% was sanitation loans and loans given to buy products such as solar lamps and mobile phones.
RBI lowered the minimum qualifying asset criteria to 60%, providing all NBFC-MFIs a window to grow secured loans. All pure-play microfinance lenders are now eyeing growth in the secured business to reduce concentration risk.
The session saw a power packed panel of experts that comprisedSurendra Mehta, National Secretary- IBJA,Ranjith Singh,Head of Business Development, IIBX, Shweta Dhanak, Director – Vijay Exports,S Thirupathi Rajan, MD Goldsmith Academy, Shivanshu Mehta, SVP & Head Bullion-MCX.The session was moderated by Chirag Seth, Principal Consultant, Metals Focus.
Some salient points made by the panelists:
- Gold prices are not linked to consumer demand. They are linked to central bank buying and ETFs
- Till the banking system doesn’t collapse, gold price will continue to rise
- Jewellers were advised to use a mix of futures and options for risk mitigation
- Given the current situation manufacturers selling on credit or unfavorable deals could be fatal flaw for business.
- Precious metals forecast: Surendra Mehta said he sees gold in 2026 in $4900-5100 range and silver in $90-105.Looking further he said by 2030-2035 gold could touch $18000- 20000 and silver could reach $500. Chirag Seth predicted silver touching $105 this year and gold moving in the $ 5200- $ 5500.
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