Gold Loan Demand Strong Amid Tighter Unsecured Credit Norms

After a 40% loan growth in Q1, India's largest gold loan NBFC Muthoot Finance expects demand to stay strong, aided by soaring gold prices and tighter regulatory guidelines for unsecured credit. Managing director George Alexander Muthoot shares the company's outlook with P. Narayanan V.

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Earlier, we got about ₹100 crore this quarter, which has gone to the P&L as interest income. Probably, another ₹100 crore should come in the next quarters. This was a facility we gave to customers—instead of auctioning the gold, we gave them time, and many of them were able to save their asset. These are one-off items, so we won't get them going forward.

Having said that, the regular business has grown by 40%, so income should also increase by around 40%.

Guidance for the growth in advances for the full year? We have consistently guided for a 15% growth in the first two quarters, but have ended up achieving much higher. We usually make a change only after the second quarter. Last year, we guided 15% and ended up with 40% for the full year. Prior to that, we guided 15% and reported a 25% growth. This year also, we have given a guidance of 15%, but should be doing much more than that. We will give a revised guidance at the end of the next quarter.