MANAPPURAM'S MSME AND OTHER VERTICALS' LOANS

A business of Rs.800 crore built from scratch in 3 years

- V.P. Nandakumar

On 14 February 2022, Manappuram Finance Limited published its results for the 3rd quarter ending December 2021. The key takeaway was that despite the impact of the omicron variant (which was particularly severe in December), we achieved good growth in our business volumes. Our consolidated AUM stood at Rs.30,400 crore, registering a sequential (or quarter-on-quarter) growth of 7 per cent. In our core business of gold loans, the loan book crossed the Rs.20,000 crore landmark while our microfinance subsidiary’s portfolio surged past the Rs.7,000 crore mark. There was good growth in vehicle and equipment finance division which contributed over Rs.1,500 crore while our home loans subsidiary accounted for about Rs.800 crore in business.

These figures were extensively reported in the media and it is not my intention to talk more about it now. Indeed, for the purpose of this article, I would like to focus on another number that did not get the attention it deserved. That number, also Rs.800 crore, is the business achieved by what we refer to internally as our ‘other verticals’ which mainly includes MSME loans besides micro-home finance and personal loans. Within this Rs.800 crore, the largest chunk of about Rs.350 crore is contributed by MSME loans followed by micro home finance at about Rs.250 crore. At first sight, there is nothing remarkable about any line of business reaching a level of Rs.800 crore in a company where the total loan book is north of Rs.30,000 crore. But then, keep in mind that as late as three years ago, this business did not exist in our books. Yes, it was only in January 2019 that we kicked off this business with the first MSME loans disbursed to a small shop owner specializing in hardware at Angamaly, a small town close to where the Kochi airport is located.

The start