Gold financing company Muthoot Finance has ventured into the personal loans segment to cater to the increased appetite for formal credit among its salaried customers.

Kochi-based Muthoot Finance, a unit of the 131-year old Muthoot Group, expects to disburse loans worth over Rs 300 crore this financial year to its customers in Tamil Nadu, Telangana and Andhra Pradesh. The facility will be available to borrowers across 20 cities in Southern India by the end of the fiscal.

"Anyone with monthly wages of Rs 10,000 in smaller towns and Rs 20,000 in bigger cities can avail this scheme. Repayment tenor will vary up to 5 years at an interest of 14-21 percent," managing director George Alexander Muthoot told CNBC-TV18.

According to George Alexander, the personal loan segment in India has grown consistently over the last 15 years and the appetite for the same amongst its existing clients remains robust.

Muthoot Finance, which boasts of nearly 6 million customers, has traditionally offered loans, both business and personal against gold and jewellery assets.

The company's foray into 'salaried' personal loans is on the back of increased demand for credit across low-to-medium income households.

"Online access to banking records, credit history and financial digitisation has strengthened this segment against defaulters," said George Alexander.

First Published:Jul 12, 2018 1:02 PM IST