Listed RBI-registered non-banking finance company TruCap Finance is aiming to achieve a gold loan AUM (asset under management) of Rs 700 crore in the current financial year through expanding its business in tier 3 and tier 4 cities, which are largely underserved by the formal credit channels.
TruCap has witnessed the maximum growth in MSME gold loan business in tier 3 and tier 4 cities with women borrowers in the age group of 31-40 years being one of their biggest customers. The growth in disbursal has been 108 percent till June 2023 as compared to the same period last year with 42% addition in new borrowers.
Underlining its commitment to nurturing talent, TruCap has implemented a fast-track talent development program. This initiative aims to provide leadership opportunities to grassroots talent, with a special focus on empowering women leaders who have demonstrated exceptional outcomes in steering the branch-led business.
Rohan Juneja, CEO of TruCap Finance said that in the first half of FY24, the gold loan AUM has grown to Rs 500 crore as compared to Rs 200 crore in the same period of the previous fiscal. “During the Dhanteras-Diwali period, we have seen a year-on-year growth of 12 percent to 15 percent in our gold loan business.”
He added “ However, we have been somewhat cautious while lending against pledged gold given the rise in gold prices. Geopolitical tensions have led to higher gold prices which could potentially cause some volatility. Due to this, we are being cautious.”
The loan size during this festive season has averaged around Rs 1.5 lakh, while the average size across the entire portfolio stands at Rs 1.2 lakh. “Generally, the Kirana traders, small businesses, and small traders have opted for the gold loan,” added Juneja.
He said that nowadays more people are open to taking gold loans. “Earlier it was seen as a sort of social stigma. But not anymore. Moreover, it is easier to avail of a gold loan. So people are opting for it,” Juneja added.
The company has 122 branches (operating as brand Dhanvarsha – powered by TRU), including 7 new branches in Rajasthan marking it’s entry in the state. The company has its presence in the states of Maharashtra, Madhya Pradesh, Gujarat, Goa, Delhi NCR, Punjab, and now Rajasthan. More than 84% of its branch presence are in tier 2/tier 3/tier 4 towns.