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We have not faced the ALM issues: Senthil Kumar, Manappuram Finance

Wednesday, December 19, 2018
Business Standard

Higher borrowing costs detrimental to retail lending: Senthil Kumar, Manappuram Finance

Senthil Kumar, Executive Vice President at Manappuram Finance tells Advait Rao Palepu that despite borrowing costs rising, the company has not faced the asset-liability management (ALM) issues that other non-bank financiers faced in recent months. However, he says if financiers face higher borrowing costs in the coming months it would be detrimental for retail lending and consumption.
Has the present liquidity and ALM situation affected Mannapuram Finance?
Well, I understand that our cost of funds has gone up a bit over the last one year. However, we do not face any pressure on the ALM side. A large part of our consolidated AuM — in fact nearly 75 percent — is parked in short term gold loans where the average loan gets repaid in about 60 days. Another 15 per cent is accounted for by microfinance (MFI) loans which are also quite short term. The Small-Medium-Enterprises (SME) book was under pressure on account of the twin disruptions of demonetization and GST. These pressures are now easing but the overall cash flows are still somewhat strained although it is heading to normalcy. Therefore, we just do not face the ALM issues that other NBFCs may be facing.
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