With India’s ever-increasing gold market, Capital Small Finance is all set with their gold loan to hit their customer base. Realizing the demands of a gold loan, they are set to leverage the investments made in the last 2-3 years of conversions into a bank. Having 850 banking outlets, Capital small finance bank is confident that the scale of the bank is soon going to be more than what it is today. The management is aiming to make Capital small finance one of the most reputed and prestigious banks in the country.
Small Finance Bank’s managing director and CEO, P N Vasudevan said in an interview that 90% of the bank’s advances go to small businesses in an informal economy. He also said that there is a massive unmet demand in the underserved segment and that he believes has left enough room for the bank’s growth. The bank has been growing at a rate of 30%- 35% per annum over the last couple of years. Microfinance contributes about 23 %- 24% of their book with commercial vehicle finance contributing 25%, small business loans take up 40% and SMEs contribute about 5% to the bank’s books.
Aiming to increase the growth rates, gold loans are the bank’s next attractive product. With affordable rates, the management is confident that they can acquire high profits from it. Having more than 3.5 million clientele on the asset side, the bank’s focus is not just on turning this pre-existing clientele into the consumers of gold loans, but also attracting more customers towards them. Their focus is towards offering low-interest rates and higher market value for gold loan borrowers so that retaining them for a longer duration of time is not a task for the bank. Through these newly launched gold loans, the bank is also determined to reduce their cost-to-income ratios and increase their profits thus making Capital small finance Bank Gold loan an important asset for the company.