Muthoot Finance Strikes Gold
Muthoot Finance Ltd is the largest gold loan service provider in India. Just how big is it? Muthoot has a customer base of over 6 million and serves as many as 80,000 people daily with its more than 4,400 branches across 20 states, four Union Territories and the national capital territory of Delhi.
But while the numbers are staggering, they only tell part of the story of Muthoot’s success.
Muthoot Finance is the flagship company of the Muthoot Group, and its stocks are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India.
Established by Shri M. George Muthoot in 1939, this pioneering enterprise is licensed as a non-banking financial company. The base of its operations can be found in Kerala, India, although Muthoot has already expanded its reach abroad, specifically in the UAE, the UK and the US.
Currently, George Alexander Muthoot heads the company.
Muthoot’s gold loan service revolves around providing personal and business loans that are secured by gold jewelry.
The loan can range anywhere from Rs. 1500 to Rs.1 core and is disbursed in a matter of minutes. Minimal documentation is required and pre-payment options, without penalty, are offered.
Plus, Muthoot sets low interest rates and keeps its interest rate policy flexible to cope with volatile markets.
Driven primarily by its gold loan business, Muthoot’s revenue increased 18 percent in fiscal year 2012 to 2013, reaching 5,387 Crores. During the same period, the company also saw its net profit rise 13 percent to 1,004 Crores.
Muthoot seems to be poised for further growth with the upgrades it has been introducing. Among these is the white label ATM, which treats the credit and debit cards of all banks at par, and the in-house-developed Core Banking Solution, a centralized web-based platform.
While it specializes in gold financing, Muthoot also offers wealth management services in the form of insurance plans. It also sells gold coins under interest-free monthly installments and is one of the few institutions in India to deal in silver coins.
In addition, Muthoot facilitates real-time money transfers and buys and sells all major foreign currencies at competitive rates. It has even expanded into providing travel services, including tour packages and arrangements.
Even with its range of services, Muthoot has been steadfast in its goal of extending financial inclusion. For years, the company has been venturing into the remote areas of India, bringing thousands of semi-urban and rural Indians into the banking network. Today, more than 70 percent of its branches are located in such regions.
Muthoot’s efforts to reach the under-served have not gone unnoticed. In 2013, it received the prestigious Skoch Financial Inclusion Award for making banking and financial services accessible to the “aam aadmi.”
Corporate social responsibility
That same year, Muthoot was conferred with the Rotary Binani Zinc CSR Award in recognition of its CSR programs, which are handled by the Muthoot M. George Foundation. The foundation has been involved in a variety of CSR activities, from shouldering the bill of underprivileged cancer patients to providing educational scholarships to outstanding students. It has also taken the lead on environment-friendly initiatives like tree-planting projects.
Muthoot may be the front-runner in gold funding, but it has done more than that. The company redefined the “gold loan” concept in India.
In earlier years, people only considered availing a loan in exchange for their gold jewelry as a last resort or in extremely desperate times. But now gold is seen as a legitimate banking product and, as it turns out, is actually an important economic driver.
As the largest gold financing company in India, Muthoot Finance has worked its way to the top, continues to improve its services, and never forgot to give back to the community. With its vision and commitment, the company will, more likely than not, keep on growing.