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We plan to reduce our gold loan portfolio to 50% in 10 years, says VP Nandakumar, CEO of Manappuram Finance

Monday, December 14, 2020

We will primarily remain a gold loans NBFC, but we want to scale up our affordable housing business to 20% in 10 years, says VP Nandakumar, MD and CEO of Manappuram Finance. 
Manappuram Finance wants to diversify its loan portfolio for better risk management. The Kerala-based NBFC plans to reduce its exposure to gold loans from 95 percent to 65 percent in three to four years, and 50 percent in seven to ten years. 'We want to scale up our affordable housing business to 20 percent in ten years,' VP Nandakumar, MD and CEO of Manappuram Finance, tells Neha Bothra in an interview. This is part of the lender's long term strategy, but in the current fiscal year the non-gold business is likely to 'remain at the same level or show a marginal growth' of around 4 percent. While disbursals and collections have reached pre-Covid levels, Nandakumar expects an 'ultimate loss of 5 percent' in loan recovery. The gold loan business is expected to grow at 20 percent this fiscal, but the uptrend in gold prices is a concern. In this chat, Nandakumar outlines the company's long term business strategy, and discusses the performance and growth outlook for its gold, affordable housing and microfinance portfolios. Edited excerpts:  
The havoc caused by COVID-19 hurt earnings. Do you think the pain is largely behind the business now?  
It appears like that because our presence is largely in rural and semi urban areas, and the activities have somewhat reached normalcy. Semi-urban transportation has been re-established, and shops, small manufacturing units, auto industries are now working, and some construction activity is also going on. But, we see some softness in government (spending) and the road construction sector. Overall, there is a positive attitude, and business is almost back to 90 percent normalcy. 
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