Manappuram Finance Looks Beyond Gold Loans

V.P. Nandakumar, MD and CEO, Manappuram Finance, has set a target of 10 to 15% growth, even as the company has recorded a strong performance in portfolios other than gold loan:

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N. Mohan: Manappuram Finance had its gold loan business reach ₹11,750 crore as on 31 March and you had set a target of 10% growth. Is the gold loan market poised for good growth in the country?

V.P. Nandakumar: Yes, our gold loans portfolio stood at ₹11,750 crore as at the end of FY2018, which represents a 5.5% growth over the previous year. No doubt, growth was lower than what we had anticipated at the beginning of the year. But then, we also faced more than our fair share of challenges.

We cater predominantly to the unorganized sector which, as you know, bore the brunt of demonetization with the working capital cycle getting severely disrupted. The return to normality took longer than we expected and so, the first 2 quarters of the year saw little or no growth. It was only in the fourth quarter that growth really picked up.

With the rural economy expected to do well (given the expectations of a good monsoon and higher rural spending by the government) and gold prices holding firm, I do believe the gold loan market is poised for good growth across India. When I say good growth, I think something in the range of 10 to 15% should be achievable.

The company had diversified into micro finance business in a big way. Can you share details of growth of this business? Which are the states that you are focusing? Can you share details of the sectors to which you had extended finance?

We have diversified into micro finance in a big way along with home and vehicle loans, and some other areas as well. From a near total dependence on gold loans as recently as FY2014, we have now come to a position where the share of the new, non gold businesses in our consolidated Assets under Management (AUM) exceeds 25%.