Microfinance Private Equity

Muthoot Group in advanced talks to buyout large MFI based in North India

The Muthoot Pappachan Group (MPG) – A diversified financial services conglomerate headquartered in Kerala with interests in finance, hospitality, IT infrastructure, automotive and alternate energy, is said to be in advanced talks to buy out a North India based Microfinance Institution.

A source familiar with the deal has informed us that Mr Thomas Muthoot, Executive Director of Muthoot Pappachan Group has been conducting the due diligence and could soon be making the final announcement. The Muthoot Pappachan Group is also looking to acquire stakes in other microfinance companies operating in those regions of India where the group has no presence. The Muthoot Pappachan Group was started in Kerala as a chit fund in 1939 and currently has a strong branch network in South India.

muthoot finance

The management of MPG believes that the current crisis in Andhra Pradesh is but a temporary aberration which has brought down valuations and made acquiring a MFI quite attractive. After acquiring the Microfinance Institution, the company will most likely use the branch network to offer it’s existing products like Loans Against Gold and other financial products.

The Muthoot Pappachan Group recently tied up with the Accion International to introduce a program for training and capacity building of micro entrepreneurs. Called Streejyothi about 2,000 of the 28,000 micro entrepreneurs have already undergone training under this program in Kerala. After being trained these entrepreneurs will also be offered financial products from Muthoot Pappachan Group and in this manner the company hopes to acquire at least 100,000 clients by next year.

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