Muthoot Microfin cut Interest Rates by 35 bps

Muthoot Microfin (NSE: MUTHOOTMF BSE: 544055), a leading microfinance institution based out of Kerala has decided to cut interest rates by 35 bps. This is the second rate reduction that company has introduced this year, previously in January Muthoot Microfinance reduced interest rates by 55 bps. With this reduction, the effective lending rate for MML would reduce from 23.65% to 23.30%. This strategic initiative aligns with Muthoot Microfin’s commitment to making financial services more accessible and affordable for potential customers.

Commenting on this significant move, Mr. Sadaf Sayeed, CEO of Muthoot Microfin, said, “Muthoot Microfin being a customer-centric microfinance lender continues to share the benefit of efficiencies in Cost of Fund (CoF) with its borrowers. In recent months we have been able to raise debt at a very competitive rate, domestic as well as international lenders, who have participated in our ECB fundraise, have shown great confidence in the performance of our company and have offered us long-term funds at a very competitive rate. As a result, we have been able to pass the benefit of cheaper cost of funds to our new borrowers, all this while keeping our NIM intact.”

The company has shown tremendous growth with Asset Under Management (AUM) growing Rs. 12,193 crore in Mar ‘24 from Rs. 9,804 crore in Mar ‘23. Meanwhile, the asset quality has remained robust with Gross Non- Performing assets (GNPA) of 2.29% as of March ‘24, a 68 bps reduction of GNPA from 2.97% in Mar ‘23. Net NPA of 0.35% in March ‘24 vs. 0.60% in March 23. The company maintains a healthy capital adequacy ratio of 29% as of March, this was aided by record profits of Rs 449 crore in FY24 and Capital raised via a successful IPO in December 2023.

Mr. Thomas Muthoot, MD, Muthoot Microfin, added, “Muthoot Microfin will continue to focus on financial inclusion and empowering its customers by imparting digital & financial literacy. We have always endeavoured to provide best-in-class services to our clients, we will continue to innovate and provide the best financial services products to suit our customer needs. We will continue to expand our reach and add more customers to our Muthoot Pappachan Group network”

Muthoot Microfin currently operates in 19 states having a presence in 357 districts with 1508 branches spread across the country. Muthoot Microfin branch network serves 33.5 lakh clients living in rural parts of the country.