George Alexander Muthoot, designate executive vice chairman , Muthoot Finance
George Alexander Muthoot, 71, says leadership is built over decades, not lending cycles. As banks, fintechs and NBFCs crowd into gold loans, the designate executive vice chairman explains why Muthoot’s scale, trust and operational expertise continue to set it apart. In an interaction with businessline, Muthoot says the real challenge in the business lies not in attracting customers, but in building processes that can withstand scale and time. He talks about the strong momentum in gold loans, changing customer behaviour, rising competition, regulatory changes and the group’s expansion and diversification plans. Excerpts:
Muthoot Finance has delivered strong growth in the first quarter. What’s driving this momentum?
The biggest driver is demand. More people are increasingly comfortable using gold as a financial asset to access credit. The stigma is not there now. Earlier, pledging gold was often viewed as a last resort. That perception has changed dramatically over the years. Today, banks, NBFCs and other lenders actively offer gold loans. Customers see it as a practical and efficient financing option rather than a sign of financial distress. At the same time, availability of unsecured credit has become relatively tighter, with lenders being more cautious. This has further supported demand for gold-backed lending.
Has the correction in gold prices affected business growth?
Gold price correction is not really an issue. The peak was only for a few months and nobody lends at that rate. Today, our loan-to-value is only around 68 per cent. Those who borrowed earlier would have effectively taken only around 50 per cent at today’s prices. Most borrowers do not want to maximise every rupee against their gold. People do not want to lose their gold. They see the loan as temporary financing and intend to redeem their jewellery. Only a limited set of customers come back for higher funding through revaluation.
What are customers typically borrowing for?
For our customers, gold loans remain primarily a short-term financing product. Many customers use them to bridge temporary funding gaps. It could be a small business requiring working capital, a family completing the construction of a house, or expenses related to education and admissions. The product’s strength lies in its speed and convenience. Customers can access funds quickly without going through lengthy approval processes.
Do you expect this growth trajectory to continue?
We definitely see good growth in this business. We are opening new branches and the AUM should keep growing. We always give conservative guidance. For many years we have maintained around 15 per cent guidance. April and May required adjustments because new regulations came and customers had to adapt to new products. But June was quite good and July is also very good. I see things doing better.
How have customers responded to the RBI’s revised norms?
The regulations mainly require behavioural adjustments. Traditionally, many borrowers preferred bullet repayment structures where interest could be paid at the end of the loan tenure. Now, periodic interest servicing requirements have increased. Customers need to adapt to these structures, whether through quarterly or semi-annual payments. There is an education process involved, but we believe the market will adjust over time.
Competition in gold loans is intensifying. How do you view the influx of new players?
We have seen similar cycles before. Everybody gets attracted because it appears to be a risk-free business with reasonable yields. But this is a very process-oriented and process-intensive business. The real challenge lies in valuation, storage, audits, fraud prevention, auction management and operational controls. At scale, these become critical. Many new entrants underestimate the complexity involved. Starting is not the problem. Once scale comes, the difficulties begin. After some time, people realise the complications involved.
What gives Muthoot its edge in such a crowded market?
Leadership is built over decades. Like in banking, State Bank of India is still there, still the leader, despite new banks and small finance banks entering the market. We believe Muthoot occupies a similar position in gold loans because we helped create the market, built trust in the product and scaled it across the country. Gold loans were largely confined to Kerala and a few southern States when we started expanding nationally. We invested heavily in advertising and awareness to position it as a smart loan, not a desperate loan. That effort helped bring gold loans into the mainstream and expand the market significantly. A similar rush of new entrants happened in 2013. I would like to see the same ambition and the same enthusiasm for gold loans after two years also. Let more players come. We are not losing business. We are growing, and the market itself is expanding.
What is the strategy beyond gold loans?
We see significant opportunities in cross-selling products to our existing customer base. Our customers already have strong credit histories and use products such as personal loans, housing finance and business loans. Leveraging this base allows us to expand efficiently while reducing acquisition costs. Our Sri Lankan subsidiary is another success story. Over the last decade, we have transformed it into a predominantly gold loan-focused business with a strong branch network and stable growth. Similarly, Muthoot Money has been repositioned successfully and is now a profitable, gold loan-led business.
Published on August 2, 2026