What is your take on – http://www.firstpost.com/business/going-to-office-as-a-10-year-old-was-not-a-chore-says-muthoot-finance-md-george-muthoot-2420978.html
Specifically this – We are getting into the realm of housing finance and are looking at a niche customer base. Our gold customers could be the potential customers here as well. We have at any given time Rs 60 lakhs of gold loans. Our emphasis is on affordable housing. We are not here to compete with the SBIs or any similar entities in that space.
This new area for them would have much longer tenure loans compared to the existing ones they make with lower spreads compared to their core business
There are synergies between what they do and this new field in terms of negligible customer acquisition cost but this is a very different ball game.
Can you think of specific reasons why management is thinking this way because till now they have been very smart about capital allocation. we may argue about when this new business will start/frustify/scale but I am more interested in why would management even contemplate this move in the first place
Thanks
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