Its initial foray into used car credit had fetched Rs 14-crore business from six centres in five states.
Muthoot Capital Services (MCSL), the two-wheeler financing arm of the Rs 3,500-crore Blue Muthoot, has swerved to new directions like credit for electric two-wheeler and for consumer durables, even as its net profit for Q2FY20 dropped 34.6%. It has been testing waters in the used car segment too during the last two quarters.
“Considering the 16% de-growth in two-wheeler sales in H1FY20, we had to spot new credit segments in the bottom-of-the-pyramid market. Thus, we’d soon do test-marketing on loans for electric two-wheelers, in the changing market conditions. We are about to launch a pilot market study on credit for consumer durables like TV, fridge, mobile phones, etc, starting with Kerala this month,” COO Madhu Alexiose told FE.
It’s not the first time that MCSL is exploring new niches. Its initial foray into used car credit had fetched Rs 14-crore business from six centres in five states. “We are going ahead with used car credit, fanning it out to 17 centres. By the next quarter, we’d introduce it in Delhi too,” he said.
About 90% of the company’s business is still rooted in two-wheeler loans, as they fetch steady demand from up trends in rural demand and normal-to-good monsoon. Festival season marketing costs have pushed up operting expenses by 26%. NPAs did not melt off as expected because of floods in Kerala and South Karnataka.