MUTHOOT PAPPACHAN GROUP'S FINANCIAL SERVICES BUSINESSES GET AGGRESSIVE TO LEAD IN FINANCIAL INCLUSION SPACE

FINANCE

Muthoot Pappachan Group’s Financial 

Services businesses get aggressive  to lead in 

the financial inclusion space

by Shrutee Kate/DNS

Mumbai May 7^th, 2015: Muthoot Fincorp Ltd, the flagship company of the Kerala-headquartered Muthoot Pappachan Group iterated that the Group’s Financial Services businesses were primarily targeted towards financial inclusion, thus de-facto  partnering the Central and State Governments in their priority areas – be it Housing for all by 2022, or making financial resources available for income generation for the wider segment of the population at the bottom of the pyramid and encouraging Indian households to recycle old gold jewellery holdings in a concerted attempt to reduce imports and save on precious foreign exchange reserves.  

Mr Thomas John Muthoot, Chairman, Muthoot Pappachan Group, said: “Our Group has from inception historically addressed the financial needs of the underserved segment, pioneering Gold Loan products over 100 years ago and today offering them income generating loans or affordable low cost housing loans. We at MPG, use our expertise and understanding of the underserved segment to improve their lot and contribute to national prosperity. For the housing finance arm, Muthoot Housing Finance plans to increase its customer base to more than 50 thousand customers in the next five years. For the micro-finance arm, having secured NBFC-MFI license earlier in 2015, Muthoot Microfin, currently 7^th largest player with a customer base of 10 lakh women entreprenuers aims to become the 2^nd largest micro-finance company by 2018 providing income generating loans to 50 lakh rural households. Muthoot Capital Services is planning to tie-up with more no. of 2 wheeler manufacturers to finance two-wheeler loans across the country. Muthoot Precious Metals, aims to be the leader in the organised segment to recycle old and used household jewellery and garner the first mover advantage with the opening of its first recycling centre in Coimbatore and many more to be opened in the current fiscal year.’’

Muthoot Fincorp Ltd., the flagship company of Muthoot Pappachan Group with its proclaimed vision statement of being a trusted financial service provider for the common man offering easy and simple products at his doorstep through its wide network of 3800 branches. The Company puts extra focus in catering to the unbanked segment of customers and will also be the last mile financier for them with products which satisfy them immediately.

Muthoot Fincorp plans to expand its presence in new potential locations with necessary approvals and at the same time to consolidate in some locations as may be warranted by market dynamics. Apart from its geographical expansion the company plans to grow its product range too by understanding the needs of the customers and bring out more products both secured and unsecured. The Company added 14 lakh new customers and disbursements of 26765 crores during the last two financial years. A 30% growth in AUM has been projected for the year 2015-16.

Muthoot Housing Finance Company Ltd (MHFCL), provides home finance to the low ticket informal sector customer who finds it difficult to avail of finance from Banks. MHFCL started operations in 2011 and has so far provided loans to more than 6700 customers at an average ticket size of Rs 5.5. Lacs. It provides loans for both purchase of properties and for self-construction of property on owned plot of land.

Most of its customers are engaged in occupations with daily cash earnings and the company has developed a field based income assessment model based on informal documentation. The Company provides loans from 3-15 lacs for a period up to 15 years. Its loan book has shown a growth of 31% in the last financial year.

MHFCL which is currently present in 8 states and 21 locations will add another 10 more locations by the end of financial year 2016. The Company is also planning to expand to Delhi-NCR, Rajasthan, Gujarat, Western MP, Maharashtra, Tamil Nadu, Karnataka, Mumbai and Kerala.

It is planning a nine fold increase in its customer base over the next 5 years. The Company has also recently entered into a MoU with the Gujarat Government to finance EWS and LIG customers in the Government’s Mukhyamantri Awas Yojana.

MuthootMicrofinance the micro finance business unit of Muthoot Fincorp which works with the goal of uplifting the poor and economically backward sections of the society and planning for a capital infusion of INR 200 crore through promoter funding, recently received license for NBFC MFI. The fund will be utilized to grow its micro finance business. This would provide an impetus to Muthoot Micro Finance which has been in the business of disbursing small loans to facilitate business and entrepreneurship, conducting training programs, imparting skills, overseeing repayments and investment plans

Muthoot Microfinance is also eyeing for a PE funding by 2016-17 that will help to double its asset book from 1500 cr to INR 3000 cr in two years and planning to securitise 10% of its asset book to Bank/s in FY16. Muthoot Microfinance plans to hire 3000 in two years and 5000 jobs in the next 5 years. Currently operating in Kerala, TN, Karnataka, Gujarat, Maharashtra, Goa and Pondicherry, will further expand its operations soon in states such as Odisha, Madhya Pradesh and Uttar Pradesh by the end of FY 2016. The company is looking at disbursing INR 3000 crore in 2015-16, more than 50% fund disbursement outside South India.

Muthoot Capital Services Ltd, aNon-Banking Finance Company (Category A- Deposit Taking) registered with RBI and listed on the Bombay Stock Exchange, is among the largest 2 wheeler finance provider in the country. Currently operating in 8 States including the 5 southern states, Goa, Maharashtra and Gujarat with a portfolio of Rs.840 crores and nearly 5 lakhs cumulative no. of customers served, the company currently has a market share of 8% in South India and is all set to attain its long term vision of attaining 15% Market share in the same region. Pan India it is aiming to achieve a market share of 8%, with a disbursement of Rs 4,000 crs by the year 2020 compared to the current disbursement of about Rs 640 crs.

Muthoot Capital Services Ltd is planning to expand into regions such as Madhya Pradesh, Rajasthan, Orissa, Punjab etc. shortly along with further expansion in Maharashtra and Gujarat by the end of 2020. Keeping in mind the growth plans the company may look for other sources of funds including Commercial Paper, NCD, Securitization, etc. in addition to bank finance

Muthoot Exim, the 2 year old Precious Metals Division of the Muthoot Pappachan Group, is the first organised sector national player venturing into gold recycling business. In order to find a long term solution for India’s challenge pertaining to gold imports (CAD issue) and also to empower end consumers with better transparency, the first centre of “Muthoot Gold Point” was launched in Nov 2014 in Coimbatore. The company will open 6 more outlets by the end of this year, launching its second Muthoot Gold Point in Chennai on 13th May 2015, followed by Delhi in the first week of June and reaching a total of 20 recycling centres across India by the end of FY16-17.

Since the start of business in May 2013, jewellery under the Swarnavarsham scheme, a unique product, allowing customers to purchase hallmarked 916/995 pure gold jewellery  of low ticket sizes (1.5 to 9 gms) in tamper proof packing – a first of its kind in India. has been bought by more than 140,000 customers from 3500+ branches spread across 14 States in India. In FY14-15, SwarnaVarsham did a business of Rs 100 crores. Schemes are available to purchase gold jewellery in small quantities on the spot or in easy and affordable instalments of 3, 6 and 9 months. SwethaVarsham, another unique product  and first in India which allows customers to purchase 50 and 100 gm silver bars of 999 purity in tamper proof packing, was launched as a pilot in Gujarat in July 2014 and then expanded to 6 more States in March 2015. These silver bars are made available to customers on spot purchase basis as well as 3 months EMI

Muthoot Pappachan Technologies the IT arm of Muthoot Pappachan Group, provides cutting edge IT support to the Group Companies apart from its other Clients. Operating from Technopark in Trivandrum, the Company takes pride in providing IT infrastructure focusing on key attributes of security, availability, performance, scalability, modularity and simplicity.Its service portfolio includes cloud solutions, technology/ innovation consulting services, product implementation services, application development & maintenance/hosting services, ERP/loan management product implementation, android/IOS development, infrastructure management, data warehousing & business intelligence & virtualization.

About Muthoot Pappachan Group

Muthoot Pappachan Group (MPG), the 128 year old financial conglomerate has been providing solutions, services and expertise to lakhs of customers across the country in various domains like financial services, hospitality, automotive, realty, healthcare, IT services, precious metals, global services and alternate energy.

Over the years Muthoot Pappachan Group has grown to become a significant entity in the Indian business landscape. Currently it has more than 20000 employees, serving over a million customers. MPG's customer-centric approach and innovation in terms of new products that cater to changing customer needs have helped in winning the loyalty of innumerable customers, as well as attracting new ones. The Group adapts the latest technology and new ways to serve the customers, with an uncompromising stand on values, principles and ethics.