Gold loan major Manappuram Finance has decided to diversify its business into leading for housing finance and small enterprises.
The decision, coming on the heels of Reserve Bank's concern over 'concentration risk', was announced by its managing director and chief executive V P Nandakumar, who said, "The regulator wants us to diversify and there are synergies which we can tap. About 30 per cent of our gold loan customers run small enterprises. So, this will open up another avenue for us to lend," PTI reports. Nandakumar said the company plans to enter the SME lending business in the next three months; however, did not give a timeline for the housing business.
Lending to SMEs will be done in a more secure way such as against some underlying assets while it plans to launch a separate subsidiary for its home loan business, which will enable the company to take advantage of provisions like availing refinance from the National Housing Bank.