SUMMER PROJECT

PROGRESS REPORT NO. 2

ON

COMPANY ANALYSIS OF

(Muthoot Finance)

SUBMITTED TO: SUBMITTED BY:

Name: Dr. Aman Jindal Name: Aayush Chaudhary

Designation: UID: 20MBA1983
Chandigarh University MBA-Batch 2020-22
Location: Gharuan, Mohali
 COMPANY BACKGROUND:

The Muthoot Group is a 72; years old business based in India and interested in financial

services, Information technology, Media and Entertainment, Health care, Education,

power generation, Infrastructure, plantations, precious metals and Hospitality. The Group

takes its name from the Muthoot Family based in Kerala. The company was set up by

Muthoot Ninan Mathai in 1887 at Kozhencherry, a small town in the erstwhile Kingdom of

Travancore (Kerala). It was then later taken over by his son M John Muthoot who

incorporated the Finance division of the group which was till then primarily involved in

wholesale of grains. The company is now managed by the third and fourth generation of its

family members.

ABOUT COMPANY

Muthoot Finance a subsidiary of Muthoot Group was established in 1939, and is primarily

involved in the financial sector of the country. They are the largest gold financing company

in India in terms of loan portfolio. They provide personal and business loans secured by gold

jewelry, or 'old loans, primarily to individuals who possess gold jewelry but could not access

formal credit within a reasonable time, or to whom credit may not be available at all, to meet

unanticipated or other short term liquidity requirements. Muthoot also provides various

financial services such as Insurance distribution, health management, foreign -exchange,

money Transfer and Vehicle and asset finance. Muthoot finance was selected as one of the

Top 10 finance companies to work for in India by Naukri.com. Muthoot Finance privately

placed GN of its paid-up capital to private Equity players -Barings India and Matrix

partners India for 1.57 billion, hence valuing the earlier privately held company at over $1
billion. The company was incorporated as a private limited company on 14 March 1997 with

the name "The Muthoot Finance Private Limited" under the Companies Act.

On 18 November 2008, the company was converted into a public limited company with the

name "Muthoot Finance Limited". During the year 2009–10, the company added 620 new

branches.

In July 2016, Muthoot Finance acquired 46.83% of the capital of Belstar Investment and

Finance Private Limited (BIFPL).

In May 2018, Muthoot Finance acquired Muthoot Money, a Non-Deposit taking Non-

Banking Financial Company.

Initial Journey and Further Growth

 In 2011, Muthoot Finance introduced the service of Western Union Money

Transfer. Also, the network of the branches crossed 2,700 branches.

 The gross annual revenue of the company crossed Rs. 45 billion and branch

network expanded to more than 3600 branches in the year 2012.

 The after-tax profit of Muthoot crossed Rs. 10 billion in 2013 and also, it got a

license from RBI to operate white label ATMs.

 In 2016, it acquired Muthoot Insurance Brokers Pvt. Ltd., and in 2018, the

company got permission from the SEBI (Securities and Exchange Board) to start

asset management services.

 In 2019, it received various awards, including Flame Awards Asia, ABBY

Awards, Gold at Golden Mikes Award. Muthoot Group became the first Non-

Banking Financial Company to introduce AI (Artificial Intelligence)-based

virtual assistant i.e., Mattu and Mittu. Through TRA’s Brand trust report of 2019,
 Muthoot Finance has received No. 1 ranking as the most trusted brand of

financial services.

 Now, the famous actor Amitabh Bachchan is the brand ambassador for

representing national campaigns of the Muthoot group.

CUSTOMER ANALYSIS

Customers of Muthoot Finance include:

 Small businesses or enterprises: The company provides small business loans

for small businesses to meet their working capital requirements, purchase of

equipment and new stock or inventory and for expansion purpose. The

advantages of small-business-loan include insurance coverage, easy repayment

facilities, and flexible tenure for re-payment without any pre-closure charges.

 Salaried individuals: Working people who are working in government jobs or

private companies are target customers of Muthoot Finance who are mostly of

24-58 years of age-group. It offers affordable and fast personal loan and home

loan services to them on flexible options of repayment and without collateral.

 SME business owners: To meet the working capital needs of SMEs (Small and

Medium Enterprises), Muthoot Finance provides them a gold loan at a lower rate of

interest.

 Landlords: Landlord of premises are also customers of Muthoot Finance as the

company extends its loan services to them for meeting personal requirements, house

construction, expand business activities, etc.

 STP Segmentation

Demographics –PAN India presence, age group 25 -40 years, rural, semi-urban and

urban salaried people

Psychographics – Action oriented people who equate time with money and are risk

taking in nature

Behavioural – Most of the gold loans are for professional purpose like setting up a

new business

Targeting – Muthoot offers jewel loans to all individuals above 18 years of age

including salaried, self-employed professionals, businessmen, students, pensioners

and housewives

Positioning-A well-wisher and consumer friendly instant loan provider both in cash

and online mode with minimal documentation at nominal interest rates

Key Partners

 Leading banks: Muthoot Finance has tie-up with leading banks like YES Bank,

Nepal-based Global IME Bank, and Prabhu Bank, IndusInd Bank, etc. Muthoot

Finance acts as the Business Correspondent or Business Representative of YES

Bank who offers services to customers on behalf of the bank. For money

transfer-related services between Indian and Nepal, it partnered with Global IME

Bank and Prabhu Bank of Nepal.

 Online payment gateway service providers: Online payment service providers

like Tech Process payment services, Atom Technologies are partners of Muthoot
 Finance for e-payments. Through the partnership, customers of Muthoot Finance

are able to pay their monthly installments using the digital platform.

Key Resources

 Subsidiaries: Muthoot Finance has different subsidiary companies that are

resources of different business segments of the company. The subsidiaries

include:

 Muthoot Homefin (India) Limited (MHIL): To take care of the home loan

business of Muthoot Finance.

 Asia Asset Finance PLC: To look after the finance business of the company in

Sri Lanka.

 Belstar Investment and Finance Private Limited (BIFPL): This subsidiary of

Muthoot Finance provides services of microfinance to entrepreneurs.

 Muthoot Insurance Brokers Private Limited (MIBPL): This is a wholly-

owned subsidiary of Muthoot Finance which is considered as the insurance

broking arm of the company. It provides both life insurance products and non-life

insurance products of different insurance companies.

 Muthoot Money Limited (MML): This subsidiary of the company is the main

resource of equipment and vehicle finance operations.

 Mobile App: The mobile app of the company also plays an important role as its

resources for operating business. The in-house team of Muthoot Finance is

efficient to develop different Android and iOS platform-based apps for Business

to Enterprise (B2E), Business to customer (B2C), automation of the internal

process. The iMuthoot mobile app of the company is developed for providing

their superior quality products and services, along with advanced technology to
 customers. The customers can use the app to avail of different features and

benefits.

 Information Technology: IT plays a key role and one of the major resources of

Muthoot Finance. The company has an advanced IT-enabled Core banking

system (CBS) which is a user friendly and powerful banking solution and that is

implemented in all branches in India. CBS functioning includes processing

centralized transactions, management information systems (MIS), and back-

office of the company. It facilitates enhancing convenience to customers by fast

services and providing cost-effectiveness. Muthoot Finance also makes use of

Artificial Intelligence (AI) based technology for enhancing its products and

services. They have AI-based chatbots i.e. MITTU (Muthoot intelligent

technology transformation utility) and MATTU (Muthoot advanced technology

transformation unit.)

 Application software: Muthoot Finance has developed a series of mobile

application software for enhancing its internal support system and customer

services. Their Smart Eye is one such application software that uses advanced

technology to secure a big amount of gold in different remote branches of the

company. It is a cost-effective and centrally managed tool.

 Manpower or staff: The staff of Muthoot Finance is well qualified and skilled

enough to handle all the financial requirements of customers and their queries.

The technical staff is competent enough to develop in-house app software to

enhance the services provided by the company.

 Key Activities

 Advertisement and promotional activities: Muthoot Finance organizes various

informative ad campaigns through print and electronic media i.e. different TV

channels, newspapers, radio, magazines, etc. Also, billboards, vehicle displays,

etc.

 App development: Muthoot Finance has an in-house technical team to develop

various user-friendly mobile apps to view required information and for 24/7

online transactions. The team develops different apps that are compatible with

both iOS and Android platforms for internal process automation, B2E, and B2C

platforms of enterprise mobility.

 CSR activities: The Company is involved in conducting various corporate social

responsibility (CSR) activities to provide economic, social, and environmental

benefits to all stakeholders or communities they deal with. Their CSR activities

include providing scholarships, health and education initiatives, eco-friendliness,

tree-plantation, sports, donations, women empowerment, etc.

Channels

 Website: Muthoot Finance provides all necessary information of its offerings

and platform to apply for gold loans and other services through its website i.e.

muthootfinance.com

 Mobile App: Through iMuthoot mobile app, Muthoot Finance provides facility

to customers to avail of all features and available services.

 Social media: The ads of Muthoot Finance can be seen on different social media

platforms like Facebook, Youtube, Instagram, Twitter, Linkedin, etc.

 Muthoot Online: Muthoot Finance offers its online services to customers

through ‘Muthoot Online”. This is the online service platform for customers to

make an interest payment and principal re-payment amount through net banking

or debit card. Using this facility, the withdrawal of available loan is also possible

and customers can renew eligible loans.

Customer Relationship

 Muthoot Finance values and vision is inclined towards providing the highest

quality services and support to its customers. For this, they have professional

people (staff) at their branches and customer support centers that are centralized.

The staff is well trained in the local language, understands the needs of

customers, and also, disburses loans in less time.

 The company has a proactive grievance redressal system for customers that

address the issues or complaints of customers. Customers can reach them through

e-mail or phone or SMS or personal visit or complaint form for any query or

feedback or complaints. Also, customers can approach the Grievance Redressal

officer or Principal Nodal officer as well for further escalation.

 The competitive strengths of Muthoot Finance lie in its quick response time and

customer service of high quality. They offer extended operating hours to meet the

work schedules of customers.

 The company also has AI-based chatbots to provide useful information to

customers and handle their queries. Also, FAQ and Helpline are available for the

same.
 Revenue Streams

The revenue segments of Muthoot Finance consist of interest income, service charges, sale of

shares and securities, sale of service, etc.

Competitor Analysis

The major competitors of Muthoot Finance include Bajaj Finance, Shriram Finance,

Sundaram Finance, Esaf Microfinance, L&T Finance, Manappuram Finance, etc. The

competitive advantages of the company over its competitors are as below:

 The gold loans of Muthoot Finance are provided on attractive, extremely

competitive interest rates and are the safest means for immediate fund

requirements.

 Documentation is minimal and the storage of customer’s gold is fully secure as

gold is secured safely in vaults.

 Their process of providing loans is transparent as their staff provides a thorough

understanding of their process to customers before sanctioning loans to them.

 There are no hidden charges or additional fees other than already specified.
  Different loan-related services are available through iMuthoot, mobile app, and

their online internet platform for the convenience of customers.

SWOT ANALYSIS

Strengths

 Reduced labour costs

 Barriers of market entry

 domestic market

 high growth rate

 monetary assistance provided

 Existing distribution and sales networks

 Experienced Business units 

Weaknesses

 Investments in research and development 

Opportunities

 Income level is at a constant increase

 New markets and Growing economy

 New products and services

 Global markets

 Growth rates and profitability 

Threats

 Growing competition and lower profitability

 Increasing rates of interest

 Increase in labour costs

 Government regulations and price changes

 Rising cost of raw materials