Recent press reports said that the Muthoot group, which is well known for its gold loan segment has planned to set up a new company, Muthoot Housing Finance which will provide home loan and complete subsidy of Muthoot Fin. Corp. The company has planned to issue loans ranging from three lakhs to 10 lakhs with the repayment tenor of 15 years.
The company has planned to pay out around 125-150 crore in 18 months time through this HFC. The company is mainly looking at customers whose monthly income would be between Rs 10,000-30,000.
Mr.Maneesh Srivastava, CEO, Muthoot Housing Finance told the press that initially the promoters have decided to invest Rs 100 crore and later the funds would be raised from banks and multilateral financial organisations.
The interest rates charged will be 14-15% which is higher compared to 11-12% being charged by banks. This clearly shows that the borrowers of Muthoot Housing Finance would mostly be the ones who find it difficult to get loan from banks.
He added saying that the company is very confident that they would have many borrowers from their existing customer base. To begin with, Muthoot Housing Finance will open 25 branches in the suburban areas of Ahemdabad, Bangalore, Chennai and Mumbai.