Gold Loans

Gold loans and the common man’s success stories
15,000 Crores

Manappuram Group Chairman 
Mr. V.P. Nandakumar Say's 

For some time now, it has been our experience that a steady shift is taking place in the profile of the typical gold loan customer. Earlier, for a long time, gold loans were seen as a loan of the last resort, a taboo to be broken only when the situation was dire. Not anymore.

In the southern states gold loans have long had greater acceptability but, increasingly, attitudes are beginning to change even in the more tradition-bound northern states. And so, about half of our gold loan customers today belong to the farming and small business communities. They are traders, shopkeepers and the self-employed, who use gold loans to meet the requirements of day-to-day business; and for their exceptional needs, like the requirement to build up extra stock during the busy season.  Interestingly, even where they have availed credit limits from the banking system, gold loans continue to be used for its flexibility and hassle-free experience.

It was this realisation that gold loans were no more just a last resort that gave rise to the idea that Manappuram should hold a nation-wide contest to document outstanding examples of how people use gold loans in different productive ways in their occupational activities. The contest was called “Safalya” and it was held in March this year. It was open to all our gold loan borrowers regular in the conduct of their account. They were required to submit a write-up detailing how the gold loans they had availed from Manappuram were put to a productive use in their businesses. The response was encouraging and some of the stories were truly touching and inspiring.

Paka Dillip Dora, a tractor driver from Berhampur wrote about how he had paid a large advance amount in order to buy a second hand tractor, but was about to forfeit the amount because he was falling short of the balance amount. It was at such a moment of despair that he chanced to see a television advertisement for Manappuram Gold Loan at his employer’s residence. He promptly went home, gathered the available gold, and came to our Berhampur Old Bus Stand Branch.  It was a pleasant surprise when the branch officials told him he was eligible for a loan of Rs.56,000/-, as this was more than adequate for his purpose. Today, as a proud tractor-owner, he earns about a thousand rupees a day from soil removing work in the construction sector.

V Rajani is a young widow from Palakkad who runs a small business supplying cooked food items like “vada” and “appam” to pushcart vendors around the city bus stand. When she started off two years ago after husband had died, she had no background in business and she had no idea if she would get a bank loan. Like most Indian women, she had some gold and with that she came to Manappuram’s Palakkad Town RS Road branch for a gold loan. Today she earns anywhere up to twelve hundred rupees a day and over the course of two years managed to save enough money to buy a small plot of land. She now looks forward to building a house for her family consisting of her mother and child.

Dillip, the tractor-driver turned tractor-owner from Berhampur (Orissa) and Rajani, the small business owner in Palakkad (Kerala) live in worlds that are hundreds of miles apart. All the same, their stories have this common thread running through them that speaks of the struggle that everyday life is for so many in India; and how, despite all the adversities, we all aspire to better our lot.

And yes, their examples are also a testimony to the power of gold to change the common man’s life for the better. As we are fond of saying at Manappuram, by “energising gold”, we empower lives.

About Mr. V.P. Nandakumar

Shri V.P. Nandakumar,  Chairman of the Manappuram Group of companies based at Valapad, Thrissur. This Group of nine companies has diversified interests in gold loans, asset financing, insurance, foreign exchange, money changing, gold jewellery, healthcare etc. Its flagship, Manappuram Finance Limited (MAFIL) is India’s first listed, highest credit rated and the most successful gold loan company with a gold loan portfolio exceeding Rs.10,000 crores and more than 2,500 branches across the country. His recent ventures include retail gold jewellery (now branded as Riti Jewelry) and affordable healthcare under the MAcare brand name.