Muthoot Finance expects gold loan growth of 15 percent for FY22, George Alexander Muthoot, the deputy managing director, Muthoot Finance told CNBC-TV18.

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The gold loan portfolio growth looks promising in H2FY22 and we expect banks to do well in gold loans in Q3FY22 and Q4FY22, Muthoot added.

“Gold loan demand has picked up in rural and semi-urban areas. The prospects seem to be okay, demand has picked up actually not only in the cities but also in the outlying areas outside the city also. There we see a lot of traction for gold, because of the fallout of the economic activity, which is also picking up. So when economic activity picks up, overall demand for funds goes up and the quick choice and quick loan of gold loan comes to the forefront. We see good prospects this year also as far as the AUM in the gold loan business is concerned,” said Muthoot.

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Alexander Muthoot also added that affordable housing segment growth has not picked up for eight quarters in a row. Operationally, housing finance is a challenging business, he added.

“Our focus or our housing is on the affordable sector. Now affordable sector growth in housing has not really picked up, to me it has not really picked up because there are issues not only for four quarters, the last eight quarters, there have been issues with the builders and quality of the buildings etc. That has been actually troubling the borrowers also who have been not getting the correct buildings from these builders. So that is now very, very slowly coming up,” he added.

Also Read: Can India’s gold loan market keep up with consumer demands?

So, the housing sector is picking up, the housing business is picking up but the retail or the affordable housing has really not really picked up and that is what we are waiting for, said Muthoot.

First Published:Dec 21, 2021 12:11 PM IST