Unraveling the Success Story: What Makes Muthoot Finance a Leader in the NBFC Sector?

In recent years, NBFCs (non-banking financial companies) have emerged as the key players in India's financial sector. Offering a diverse range of financial services, they are becoming a preferred choice for individuals as well as businesses.

Muthoot Finance is one such player that has been dominating the country’s microfinance landscape for a while now. Often referred to as India’s largest gold loan NBFC, they offer hassle-free gold loans at the cheapest interest rates. In addition to this, Muthoot Finance also offers housing finance, personal loans, and several reliable wealth management solutions.

A Sneak Peek into the Past :

Known for a legacy of 800 years, the Muthoot Group was founded in 1887 by Late Shri Ninan Mathai Muthoot. He started it as a small-scale, modest trading business in Kozhencherry, a remote village in Kerala. A few decades later, his son, Shri M. George Muthoot, introduced the new idea of providing gold loans. He established Muthoot Finance Ltd., the flagship company of the Muthoot Group, in 1939.

This was a time when a large number of people were migrating and in urgent need of cash to cover their travel-related expenses. Since the concept of a gold loan was not new, the Muthoot Group made the process more streamlined. As a result, this one step proved to be the ultimate game-changer and transformed the financing landscape.

In 1978, Shri M.G. George Muthoot, son of Shri M.George Muthoot, who was a mechanical engineer by education, joined the family business. He was the person who made sure that the Muthoot Group came out of its traditional territories and started expanding in the northern part of the country as well. Soon after, they opened branches in other states and union territories, only to become a leading gold loan company in India.

Over all these years, the Muthoot Group witnessed a complete transformation and continued growing by leaps and bounds. Started as a single product company, it became a multidimensional business group with 20+ diversified business divisions. Some of the major industries where Muthoot Group has created a strong presence include financial services, wealth management, money transfer, forex, securities, vehicle and asset finance, media, IT, healthcare, etc.

The Current Scenario :

Muthoot Finance Ltd. is a renowned non-banking finance company, currently being run by the four Muthoot brothers:

• Shri M.G. George Muthoot (Chairman, The Muthoot Group),
• Shri George Alexander Muthoot (Managing Director),
• Shri George Thomas Muthoot (Joint Managing Director)
• Shri George Jacob Muthoot (Joint Managing Director)

They are taking forward their late father's vision and commitment. Muthoot Finance is considered the largest gold loan company not only in India but all over the world as well. With a holding of more than 140 tonnes of gold, they are also among the companies with the largest gold reserves in the country.

Currently, the company has more than 3,510 branches spread across 23 states. Apart from this, they have also created a presence in the USA, UK, UAE, Sri Lanka, and Central America. What makes them different from any other gold loan company or NBFC is that they have not shut down a single branch so far.

How did Muthoot Finance become the best gold loan company? :

In today’s time, if there is a mention of gold loans in India, Muthoot Finance is one of the first few names that come to mind. The organisation uses a customer-centric approach, and the main focus is on serving the customers’ needs. Over all these years, Muthoot Finance has completely transformed the borrowing mechanism. With quick turnaround times, simplified processing, minimal documentation, and flexible tenure, they made it extremely easy for customers to obtain gold loans.

Their gold loans start from as low as INR 1,500 and can go up to even INR 1 crore. All a borrower needs to do is get the gold ornaments evaluated, and he or she can get access to funds within no time. Their hassle-free process allows you to make the loan repayment over the counter. You can also choose to clear the loan even before the loan tenure comes to an end. In short, Muthoot Finance ticks all the boxes for being the best gold loan company in India.

Other major factors that contributed to the company’s rise are its rapidly growing portfolio of gold loans and a low rate of borrower default.

Since Muthoot Finance gold loans are known for their fast processing and ease of application, they have emerged as an option of convenience. They also managed to remove the stigma attached to this financing option. In today’s time, Indian families don’t see a problem in using their gold ornaments in times of need. Apart from that, their low default rate is most likely to be the result of their ‘only jewellery’ policy. For Indians, gold jewellery has a great sentimental value attached to it, so they ensure that it comes back to them.