Muthoot Microfin hopes to have 50% of its collection digitally by September

The Kerala-based lender of the Muthoot Pappachen Group collected as much 1,000 crore digitally till March or 34 per cent of its entire collection, which was only 168.30 crore in the last financial year. Its average monthly collection is Now 550 crores.

“For the first time our digital payment has crossed 1,000 crore in FY22 – 1,088 crore to be precise, which is 34 per cent of our total collections – a growth of 547 per cent year-on-year. Already our loan disbursements are done digitally only. And we want to take it to at least 50 per cent by September this year, Chief Executive Sadaf Sayeed told PTI over phone.

The microlender expects to disburse 25-30 per cent more loans this fiscal, taking its assets to around 12,000 crore, with a growth of 47 per cent over the recently concluded financial year.

The company closed FY23 with a loan book of Rs. 9,209 crore and expected net income of Rs. 200 crores.

The company will enter Rajasthan this year and has entered Uttarakhand and Himachal earlier this year.

Sayeed said that as an incentive for customers to make online payments, they 10 cashback on every loan payment under a digital payments initiative called Parivartan.

He said that the digital initiative has resulted in minimum operating expenses, positive impact on employee productivity, quick turnaround time and cashless transactions.

Digital collections were highest in the South, with 54 per cent of the total, with Kerala and Tamil Nadu topping digital collections. 250 crores. The north had a 28 per cent share, with east and west the rest, he said, adding Bihar contributed the most to the digital collection with 40 per cent or more. 130 crores.

He added that most of the digital payments are done through UPI, with a very minor percentage through net banking or debit cards.

Muthoot Microfin, backed by two US-based private equity funds – Greater Pacific Capital and Creation Investments Capital Management – serves over 2.77 million clients by March 2023, growing from 2.1 million in FY22.

Greater Pacific entered with an investment of USD 60 million for a 14 per cent stake in December 2021 and an additional 2.7 per cent for USD 20 million in December 2022. Creation Capital first appeared in December 2016 100 crores and pumped 30 crore later and then given 27 crore more through the recent rights issue. It currently holds 9.3 per cent stake in the company.