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Gold loan & MFI industry faring well in current environment, says Manappuram Finance
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
IT was a strong show from Manappuram Finance as loan growth in the third quarter was the highest ever, while gold holdings too were at record levels. Loan growth was over 35 percent. Discussing the outlook for the company going forward, VP Nandakumar, MD and CEO of Manappuram Finance said, “Our targeted growth in gold …
IT was a strong show from Manappuram Finance as loan growth in the third quarter was the highest ever, while gold holdings too were at record levels. Loan growth was over 35 percent.
Discussing the outlook for the company going forward, VP Nandakumar, MD and CEO of Manappuram Finance said, “Our targeted growth in gold loan had been around 10-12 percent, the tonnage growth. In the three quarters, we could achieve a growth of 11 percent. In the last quarter we may be able to reach higher tonnage growth than these three quarters. We have been aided by the price increase of the gold, which has led to the volume growth to this level,” he said.
“The asset quality was maintained in these difficult hour for the non-banking financial companies (NBFCs) industry. Both gold loan industry and microfinance institutions (MFI) industry are faring better,” he said in an interview with CNBC-TV18.
On demand Nandakumar said, “Demand has also better in the last three quarters. So I hope in the last quarter as well demand may be maintained.”
In terms of asset quality in the non-gold space, he said,“The recovery is slightly less because of the natural calamities like floods in some places. In some districts of Karnataka, there are some political issues. Some local politicians interfere with the collections etc but the companies themselves are very confident of resolving it. If this is done, the collection may remain around 99 percent. So we don’t have much concerns about that.”
When asked if there is further scope for the deterioration in the asset quality for the MFI business, he replied they hoped the asset quality would improve since they had done few things to address the challenges they faced. ” With all the measures, I don’t think the asset quality will deteriorate any further.”
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