Budget Should Give Policy Directions & Accelerate Growth’. Mr. George Alexander Muthoot, MD, Muthoot Group, talks to Business World
What is your expectation from the forthcoming Union Budget 2014 of NDA?
The NBFCs are fairly optimistic on the forthcoming budget and it should not only be investor friendly and taxpayer friendly but also be forward looking and progressive, giving policy directions and accelerating growth. The Industry expectation from the financial Ministry is as follows -:
Development of frameworks and principles for achieving deeper financial inclusion to ensure viability, scalability and sustainability for all the stakeholders
Issuance of bank licenses to institutions for functioning as Wholesale Banks, whose primary role will be lending as proposed by Nachiket Mor Committee
NBFCs should be considered as an integral part of the larger banking system and not as Shadow Banks.
Strategy of adoption of ‘priority sector deposits’ to mobilize deposits in unbanked areas.
NBFCs be mandated to fulfil PSL (priority sector lending) obligations – loans from banks to Gold Loan NBFCs be treated as PSL hitherto (also recommended by Nigam Committee)
Role of differentiated licensing and NBFCs as a means of providing increased access to credit, and the transition of NBFCs to differentiated banks for achieving greater financial inclusion
Sufficient access to affordable, formal credit for low-income households and small businesses through institutional designs such as Payments banks, payments operators, Regional bank
What is your expectation with regards to your sector?
We expect that the budget should also have measures aimed specific to Gold loan sector and recognize gold loans as being low risk category in the loan portfolio, as financial inclusion is a national priority gold loan companies can be a useful tool in achieving this objective given the size and reach of the sector.
What is your view on inclusive growth?
Our vision is to enpower the rural indian via inclusive development by way of providing access to credit and financial services to every Indian. If we take a macro view, then plainly put we are the pioneers of the gold loan business in the country, but if you take a more in-depth micro view then we are more than just a gold loan company. Ours is a business of bringing change in the people’s lives and indeed has an element of corporate social responsibility embedded in it.
With presence of over seven decades our focus has never changed and that is to serve people. We were the first organisation, where our forefathers understood the importance of rural emergence and have been actively playing the role of financial inclusion for decades together. There is immense potential in rural India and the lot of entrepreneurial spirit and we have guided them on how monetising idle family gold could help them not only kick start, but achieve their dreams, besides, removing the age old taboo of pledging family gold.
It’s our clear vision, transparent practices and addressing customer’s urgent needs that have helped us grow to what we are today.
What has been the CSR initiative of Muthoot Finance?
Late Shri. M. George Muthoot, Founder Chairman-Banking, believed that “one should not lose any opportunity that may come across one’s life to help the poor and the underprivileged”.
It is from here that the company has developed its CSR vision “to constantly give back to the community by identifying and facilitating growth in areas which are less privileged”.
The company reinforces its social commitment through its Corporate Social Responsibility (CSR) wing – The Muthoot M George Foundation – which works on various initiatives for the poor, needy and less privileged. Initiatives include free medical assistance, food distribution to patients among others.
The foundation aims to be a prominent contributor to the community and helps low-income, uninsured and underserved patients receive access to healthcare, education and works on the following social causes:
Projects in Public Interest
Socio-Economic Development of the poor and underprivileged
Relief and Rehabilitation during and after natural disasters
Recently we have launched a very unique healthcare outreach programme called as “Muthoot Snehasraya” which was launched in Kerala last year. The project aims at prevention and awareness of kidney and other lifestyle related diseases.
In education, we have introduced Muthoot M George Excellence scholarship programs covering Kerala (1000 ) Karnataka (400)and Andhra Pradesh ( 400 ) government schools. Also we have tied up with 2 NGOs Magic Bus and Save the Children, under Magic Bus we have imparted education to 2000 marginalized children in the States of Tamil Nadu (Chennai) and Jharkhand (1000 children in each state).
Save the children NGO works towards improving the quality of education in primary schools managed by East Delhi Municipal Corporation and to support the National objective of universal enrollment and retention. The association will target 10,000 children , 65 teachers in 12 MCD schools. Apart from this we also provide financial and marriage assistance to socially deprived families and widows.