Microfinance

Muthoot Fincorp planning to raise 2000 crore debt for it's gold loan business

The financial services arms of the Kerala based Muthoot Group – Muthoot Fincorp Ltd (MFL) which is a NBFC and involved in the gold lending business plans to raise around Rs 2,000 crore in this financial year to meet it’s business targets.

Thomas Muthoot the director of Muthoot Fincorp Ltd, said in an interview that the company had set a target to increase its gold lending business to Rs 5,500 crore by March 2011 from the current Rs 3,500 crore.To achieve this, it is planning to expand its branch network to 1,600 from 960 which it currently has and would be raising Rs 2,000 crore by way of debt.

muthoot fincorp

The company recently launched its new scheme – Smart Gold Loan – which it expects to contribute Rs 500 crore.The Smart Plus Gold Loan gives a repayment facility in terms of instalments to the borrower of the gold loan. About 90 per cent of value of gold can be availed as loan by the borrower and he can repay the loan in six to 36 equated monthly instalments.Currently, gold loan accounts for 90 per cent of the total business, he said.

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