Muthoot Finance foresees continued potential and momentum in gold loans
George Alexander Muthoot, MD of Muthoot Finance emphasized that the momentum in gold loans is set to persist, driven by various factors that make this segment highly promising.
Despite increased competition from traditional banks entering the gold loan market, Muthoot Finance remains confident that the sector will continue to flourish. George Alexander Muthoot, MD of the company emphasised that the momentum in gold loans is set to persist, driven by various factors that make this segment highly promising.
George Alexander Muthoot shared his insights on the future of the gold loan market during an interview on CNBC-TV18. He expressed his optimistic outlook, highlighting the continued momentum and untapped potential in the gold loan financing segment.
One key factor contributing to the enduring strength of gold loans is the intrinsic value of gold itself.
"Gold has historically been considered a reliable and stable asset, making it an attractive option for borrowers seeking quick and hassle-free financing solutions. With gold prices showing resilience over the years, borrowers find it advantageous to leverage their gold assets for financial support," he said while talking to CNBC-TV18.
Furthermore, the gold loan financing segment is known for its accessibility and speed. Unlike many traditional loan options, gold loans often require minimal documentation and have faster approval processes. This convenience has made them a preferred choice for individuals in need of immediate funds.
George Alexander Muthoot also highlighted the cultural significance of gold ownership in India. Gold is not only a symbol of wealth and prosperity but also holds sentimental value for many families. As a result, individuals are often more comfortable using their gold assets as collateral, rather than parting with them permanently.
Additionally, the evolving financial landscape and the advent of digital platforms have made it easier for lenders like Muthoot Finance to reach a wider customer base. Online platforms and mobile applications have simplified the loan application and repayment processes, making gold loans even more accessible to a diverse range of borrowers.
Regardless of increasing competition from banks, the combination of gold's intrinsic value, accessibility, and cultural significance ensures that gold loans will continue to thrive.
Meanwhile, the gold lending firm recorded a 21.6 percent year-on-year (YoY) rise in its standalone net earnings, reaching Rs 975.1 crore for the initial quarter concluding on June 30, 2023.
During the same quarter in the previous year, Muthoot Finance reported a net profit of Rs 802 crore, as disclosed in a regulatory filing. The lender's net interest income (NII) also witnessed a substantial 23.8 percent year-on-year increase, reaching Rs 1,934.9 crore, compared to Rs 1,562.3 crore in the corresponding period of the previous fiscal year.
For the entire interview, watch the accompanying video
(Edited by : Anshul)
First Published: Sept 7, 2023 5:27 PM IST
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