While Manappuram’s long track record in gold loan gives so much confidence I am not so sure about the other part of their portfolio. They have seen many cycles in gold loan but the problem is that now only about half of AUM is gold loan; a quarter of it is in MFI .I don’t know how to look at it but the signals are not so great.
A couple of days ago Manappuram was in news for this reason . Today it is about Asirvad . RBI has pointed out the usurious lending practices.
One instance of press coverage may not tell the standards set in lending practices, if any, but neither do such instances taken together gives one confidence in the direction they are taking.
While both Manappuram and Muthoot are known as gold lenders , for Muthoot more than 80% AUM is gold loan. This should be taken into account while comparing both.
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