Mumbai, Jul 20 (PTI) Mid-sized gold loan-focused NBFC Indel Money has set a target of growing over threefold with a loan book of Rs 1,000 crore by March, as it expects to attract customers with its two-year tenor loan offer and expansion plans.

The aggressive growth strategy is also driven by the near-record gold prices and lack of income generation opportunities that many individuals and businesses are facing due to the coronavirus-induced lockdowns, forcing them to depend on debt.

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The Kochi-based firm closed the financial year 2019-20 with an active loan book of Rs 341 crore, up from Rs 229 crore in 2018-19.

"On the back of the steep spike in gold prices and the resultant increase in loan value, and also the pandemic-driven demand, the loan book has jumped to Rs 450 crore as of June and we are hopeful of the same crossing the Rs 1,000-crore-mark by March," Indel Money Chief Executive Officer Umesh Mohanan told PTI.

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In 2019-20, it nearly doubled gold loan disbursals to Rs 959 crore from Rs 538 crore in 2018-19, he added.

The company, which runs 170 branches across Kerala, Tamil Nadu and Karnataka, plans to open 100 more branches by March and enter Telangana. By 2022-23, it plans to enter Maharashtra, Gujarat and Andhra Pradesh with 425 branches, he said.

Indel Money also offers working capital loans to micro, small and medium enterprises (MSMEs), apart from consumer durable loans.

Recently, Indel Money became the first gold loan player to offer two-year loans after it found "very good response" to its one-year loan launched in 2019.

Typically, gold loans are for 90 days that could be extended to 180 days, after which the borrower has to take back the gold or renew the pledge, failing which the loan company puts the pawned gold for auctions. But, a longer tenor can stave off such issues and help customers continue to own the jewellery.

"With the two-year loan offer, we are trying to provide liquidity to help individuals and small businesses tide over liquidity crisis arising from the lockdowns," said Mohanan.

According to him, traditionally, gold loan is a bridge loan and because of that, many customers end up paying higher interests by repledging for the short term.

"Our long-term gold loan saves them from this hidden trap. One doesn't need to re-pledge or jump the interest slabs under our two-year loan offer that carries 12-24 per cent interest rate.

"We also want to end the age-old practice of jewellery auctions and make sure that customers enjoy the ownership rights with a transparent interest structure and high customer support," he said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)