For large gold loan NBFCs, Business model revamp paves the path out oF a slump.
Profitability of large gold loan non-banking finance companies (NBFCs) rebounded to peak levels seen before the regulatory tightening began in 2012 and eroded returns. FY2016/17 saw their return on assets zoom to over 4 per cent from around 2.5 per cent in FY2013/14.
The improvement started as large NBFCs made two changes to their business model in early 2014. One, they started a periodic collection of interest and second, they lowered product tenure.
Earlier, gold loans had a one-year tenure with a bullet repayment that included interest. Borrowers had the option to repay any time, and over 80 per cent of them did so within six months. However, in the past couple of years, forced by a decline in gold prices, lenders started to collect interest from borrowers at periodic intervals. It was reflected in balance sheets, and interest receivables fell to 3-4 per cent of assets under management (AUM) as on March 31, 2017, compared with the previous 6 per cent or so.
Diese Geschichte stammt aus der February 11, 2018-Ausgabe von Business Today.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent ? Anmelden
Diese Geschichte stammt aus der February 11, 2018-Ausgabe von Business Today.
Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.
Bereits Abonnent? Anmelden
"Focus on the challenge of each customer"
SHASHANK KUMAR MD & CO-FOUNDER I RAZORPAY Razorpay is India's first full-stack financial solutions company
PEDAL ON THE FUTURE
THE MG WINDSOR EV, WITH ITS FUTURISTIC AND MINIMALIST DESIGN, COMBINES THE BEST OF BOTH WORLDS-COMFORT AND TECHNOLOGY
BREATHE EASY
Whether you're battling allergies, looking to remove pollutants, or simply want to breathe easier, the right air purifier can make a difference
The Taste of India in a Glass
FROM ROYAL LIQUEURS TO DISTILLED MAHUA, INDIAN HERITAGE ALCOHOLIC BEVERAGES ARE HAVING THEIR DAY IN THE SUN
LOOK BEFORE YOU LEAP
IN 2025, INVESTORS WILL NEED TO FACTOR IN VOLATILITY ACROSS ASSET CLASSES
MISSING ADVISORS
INDIA HAS JUST ONE INVESTMENT ADVISOR FOR NEARLY EVERY 200,000 INVESTORS. AT A TIME WHEN RETAIL PARTICIPATION IN THE STOCK MARKETS IS BOOMING, THIS ASSUMES SIGNIFICANCE
TURNING A CORNER
SHARED ELECTRIC MOBILITY START-UP YULU'S SHIFT TO SERVICING THE QUICK COMMERCE SECTOR IS HELPING IT GROW FAST. IT IS NOW FOCUSSING ON IMPROVING ROAD SAFETY FEATURES AS IT TURNS EBITDA POSITIVE
REALITY CHECK
INDIAN STOCK MARKETS PLUNGED BEGINNING OCTOBER FOR A HOST OF REASONS, INCLUDING A FALL IN FII OWNERSHIP. HOW DEEP WILL THE CORRECTION BE?
TRUMP'S TRADE TANGO
The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?
"The essence of the Trump administration will be transactional”
Global investor, analyst, and best-selling author Ruchir Sharma decodes why Donald Trump won the elections, what India should do, the risks, and more
