Muthoot Microfin Lowers Interest Rates by 35 bps to Enhance Affordability

Muthoot Microfin Limited has announced a 35 basis points (bps) interest rate cut, the second reduction this year following a 55 bps cut in January. This move lowers the effective lending rate from 23.65% to 23.30%, reflecting the company’s commitment to making financial services more affordable and accessible.

Muthoot Microfin has demonstrated significant growth, with Assets Under Management (AUM) rising from ₹9,804 crore in March 2023 to ₹12,193 crore in March 2024. The company’s asset quality remains strong, with Gross Non-Performing Assets (GNPA) reducing by 68 bps from 2.97% in March 2023 to 2.29% in March 2024, and Net NPA decreasing from 0.60% to 0.35% over the same period.

The company also maintains a healthy capital adequacy ratio of 29% as of March 2024, supported by record profits of ₹449 crore in FY24 and capital raised through a successful IPO in December 2023.

Speaking on this significant move, the CEO of Muthoot Microfin, Mr Sadaf Sayeed, said, “Muthoot Microfin being a customer-centric microfinance lender, continues to share the benefit of efficiencies in Cost of Fund (CoF) with its borrowers. In recent months we have been able to raise debt at a very competitive rate, domestic as well as international lenders, who have participated in our ECB fundraise, have shown great confidence in the performance of our company and have offered us long-term funds at a very competitive rate. As a result, we have been able to pass the benefit of cheaper cost of funds to our new borrowers, all this while keeping our NIM intact.”

The MD of Muthoot Microfin, Mr Thomas Muthoot, said, “Muthoot Microfin will continue to focus on financial inclusion and empowering its customers by imparting digital and financial literacy. We have always endeavoured to provide best-in-class services to our clients, we will continue to innovate and provide the best financial services products to suit our customer needs. We will continue to expand our reach and add more customers to our Muthoot Pappachan Group network.”

Currently, Muthoot Microfin operates in 19 states, has a presence in 357 districts, and has 1508 branches across the country. The branch network serves 33.5 lakh clients living in rural areas.

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