Muthoot Finance Ltd, gold financing company, has registered a growth of 88 per cent in its net profit to Rs.215 crore for the quarter ended September 30, 2011, as compared to Rs.115 crore of the previous fiscal.
Figures for six months ended September 30, 2011, stood at Rs.406 crore as against Rs.199 crore of the previous fiscal.
Talking to reporters here on Thursday, George Alexander Muthoot, managing director of Muthoot Finance, said there had been an increase of two per cent in the cost of borrowings because of inflation driven increase in interest rates and impact of loss of priority sector funding.
But the strong fundamentals of the company and convenience and quickness combined with transparency in dealings had helped the company to grow in spite of slow down in economic growth all round the world.
Total income for Q2 FY12 stood at Rs.1,105 crore, as compared to Rs.529 crore in Q1 FY11, a growth of 109 per cent.
The managing director said the company was witnessing good demand in gold loans and there seemed to be a shift in customer base from the unorganised sector to non-deposit taking NBFCs like Muthoot Finance. He said urban customers seemed to have appreciated the convenience of gold loans and accepted them as a hassle-free mode of short-term funding options.
Small and medium businesses conceive gold loans as the most speedy loan for meeting working capital funding requirements.