Muthoot Finance to go slow on MFI biz amid stress in the segment: MD

George Alexander Muthoot says the firm will prioritise gold loans due to strong demand and regulatory pressure on unsecured lending, as MFI exposure is scaled down

Muthoot Finance is planning to slow its microfinance business amid stress in the segment and shift focus to gold loans where demand remains strong, company's Managing Director (MD) George Alexander Muthoot said.

 

Unsecured loans have become harder to access following a tighter regulatory stance by the Reserve Bank of India (RBI). 

 

Muthoot said the draft gold loan guidelines, if implemented in the current form, would increase compliance cost, especially for new entrants, since it will weigh on the average asset under management (AUM) per branch. 

 

Shares of Muthoot Finance fell 7 per cent on Thursday despite the lender reporting a