Having roped in Bollywood actor Akshay Kumar as brand ambassador and co-sponsoring the Delhi Daredevils' IPL team, Muthoot Finance Ltd plans to expand its business in the Hindi-speaking States with new branches and promotional campaign.
India's largest gold loan company in terms of AUM, Muthoot Finance is increasing its branches in these States from 1,300 to 1,500 by the end of the current fiscal. With this, the company will have a total network of 3,400 branches, Mr George Alexander Muthot, Managing Director, said on Wednesday.
The company, which had increased its marketing and advertising spend from Rs 65 crore in 2010-11 to Rs 100 crore this fiscal, would increase it further next year, advertising in radio and trains as well as part of its promotional campaign.
Delhi, Punjab and Haryana have emerged as good markets for Muthoot in recent past, he said, adding the company would leverage this experience in other states as well. A few years ago, availing loan against gold was seen as a taboo, but now 85% vehicles are bought in India against loans, including gold loans, particularly in urban areas, he added.
Muthoot Finance's gold loan portfolio (AUM) is more than Rs.20,000 crore as of September 30, 2011, a growth of 30 times in the last six years. Currently, it holds 130 tons of gold, compared to about 15 tons in March 2005, as the northern, eastern and western Indian states are opening up to the convenience of availing gold loan within half-an-hour.
An estimated 18,000 tons of gold jewelry is held in Indian households while RBI holds around 600 tons of the yellow metal.
Muthoot Finance has seen a nearly 400% growth in the number of branches opened in the last four years, with the average ticket size being Rs 37,000, with a tenure of up to 90 days. Its customer-base has also expanded by more than 200% in three years to 55 lakh, Mr Muthoot added.