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Over 90% gold loan customers have not opted for moratorium: VP Nandakumar, MD and CEO, Manappuram Finance

Friday, May 08, 2020

Financial Express

 In the gold loan category, which accounts for 87% of our standalone portfolio, more than 90% are servicing their dues.

In the gold loan category, which accounts for 87% of the standalone portfolio at Manappuram Finance, over 90% customers are servicing their dues without opting for the moratorium, said MD & CEO VP Nandakumar in an interview with Hariprasad Radhakrishnan. He further said physical distancing is here to stay, which would lead to increased adoption of digital and phygital modes of business, adding that the company disbursed loans worth Rs 200 crore online during the lockdown to existing customers whose gold is already pledged with the company. Edited excerpts:

How do you think lockdown 3.0 will be different for your business?

I believe this phase is more like a reboot than a lockdown as most businesses are now allowed to resume operations, albeit with some restrictions on staffing. We started reopening our branches from April 20 and about 80% of our branches are working now. We expect our gold loan business to revert to normalcy once public transport resumes and local travel becomes easier.

What is your assessment of the business impact over the past two months?

In the first phase of the lockdown, all our branches remained closed and therefore, no new customers could be acquired. However, we were able to keep the momentum going with repayments and renewal of gold loan pledges taking place through our various digital channels, including the online gold loan platform. We succeeded in increasing our gold loan portfolio by over Rs 200 crore during the lockdown by relying on existing customers using our online gold loan platform to increase their borrowings against gold already pledged with us. Of course, we were also helped by the sharp increase in gold price that allowed customers room to borrow more against their existing pledges.

What share of your borrowers have opted for the moratorium?

Most of our customers have preferred not to opt for the moratorium as they realise deferment of repayments without waiver of interest would add to their interest outflow. In the gold loan category, which accounts for 87% of our standalone portfolio, more than 90% are servicing their dues. In vehicle finance and other smaller verticals, collections are improving day by day and currently amount to over 40% of the billing. We expect significant improvements once economic activities resume in full swing.

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