Abhinav Iyer, General Manager, Marketing and Strategy, The Muthoot Group, believes in the huge potential of gold loans in a country where barely 2% of gold assets are monetised. He says the Muthoot Finance ‘Sunheri Soch Season 2’ campaign – that tells stories of people who have become self-reliant with the help of gold loans - has had high impact and led to nearly 80% conversion of leads received through it so far.
What is the Muthoot group’s strategic purpose behind launching the ‘Sunehri Soch’ series of campaigns? What was the outcome of Season 1 for the company?
‘Sunehri Soch’ recognizes and celebrates achievements of the common people. It is a compilation of true and highly inspiring stories of common people, mainly women, who come from humble backgrounds but had the courage to pursue their dreams with gold loans from Muthoot Finance. Powered by their tenacity, hard work and self-belief, they have become ‘atmanirbhar’ or self-reliant, aided by finance. The strategy of Muthoot Finance is to tell real life inspirational stories from the lives of common people. It is most effective. Season 1 was launched in the middle of the pandemic, in June 2021. It was a phenomenal success because those were stories of real people - Muthoot Finance customers from different branches. We have been inspired by the success of Season 1 that also created unprecedented business impact.
What have you set out to do with ‘Sunheri Soch - Season 2’ themed ‘Atmanirbharta’? What has been the response to the campaign since its launch in February?
Muthoot Finance’s Sunehri Soch Season 2 is a compilation of five brilliant stories of people who became self-reliant with the help of gold loans, largely focusing on men and women who wanted to start their own business or expand their business, who defied age, social constraints, social criticism and still pursued their dreams. Thus, the theme this year is ‘Atmanirbharta’. The Government has also been encouraging atmanirbharta in a big way and we thought it pertinent to support the cause. The impact of the campaign has been very encouraging. We are getting an overwhelming response on our social assets - in terms of likes, shares and people commenting about them. We have already canvassed nearly 1,000 stories of new customers and shared their stories also this year. In terms of business impact too, the response has been very good. We have been converting nearly 75-80% of the leads received through this campaign so far.
How have you been amplifying the campaign? Tell us about your partnership with Red FM and other channels.
Red FM is one of the primary partners for this campaign. This campaign is heavily skewed towards Radio and Digital. Nearly 80% of the media inventory is spent on Radio and Digital. Red FM was our partner for Muthoot Finance Sunehri Soch Season 1 as well. They lived up to the partnership in the true sense and it was a collaborative effort. So, we partnered with Red FM for Season 2 as well. The campaign is being promoted heavily across all mediums - television, print, radio, OOH, BTL activities and heavily on digital. A dedicated landing page hosts all the assets of the campaign, including the Sunehri Soch Season 2 anthem in which all the top Red FM RJs come together, saluting the spirit of atmanirbharta of our five phenomenal Muthoot Finance customers.
Last year, you launched Mattu, an AI-powered chatbot. How far have you made operations digital in the wake of the pandemic?
We were one of the first ones to launch a chatbot in the gold loan NBFC space. We have made significant progress in terms of creating a Muthoot digital ecosystem for our customers. One of the prominent products that we launched, in the middle of the pandemic was called ‘Muthoot Finance Gold Loan at Home’. Customers can avail gold loans by calling Muthoot Finance employees who will then visit their homes, check the purity of gold, disburse the gold loan then and there, and leave the home only once the loan amount has been credited into the customer’s account. We also enabled interest payments through our iMuthoot mobile app, as well as loan top-ups. We have partnered with platforms like Paytm, Google Pay, PhonePe so that people can make interest payments through these platforms, besides our Muthoot WhatsApp business channel.
According to a December 2021 investor presentation by Muthoot Finance, rural India accounts for 65% of India’s total gold stock. What is the stack-up for Muthoot gold loans with regard to business from urban and rural/semi-urban parts of India?
More than 70% of our branches are located in semi-urban and rural areas. Today, we have 25,000 tons of gold in India and the vast majority of it is in rural households. Less than 2% of this gold is actually monetized by way of gold loans. There's huge potential for growing the gold loan category as a whole. Our marketing communications are not very tactical, or very interest rate-driven. Instead, we convey the message that a gold loan is good. Our aim is to bring about a change in attitude towards gold loans.
What is the current quantum of assets under management of the group? How did the company perform in the last financial year?
The company has been doing very well and our business size as well as profitability have grown. Our consolidated assets under management as of December 31, 2021 was about Rs 60,000 crore. Our consolidated profit after tax for the nine-month period preceding December 31 was about Rs 3,025 crore – a growth of nearly 10%, compared to the corresponding period in FY ’21. In these challenging times also, we have done fairly well.
Quite a few large non-banking finance companies (NBFCs) have got into the gold loans business of late. What is the Muthoot Group’s USP in this competitive market?
The biggest USP is the unblemished track record of trust we have earned from our customers. We are a brand which has a family business legacy of 800 years. It began with elephants transporting logs of wood through rivers – the mandate given to the family by the Maharaja of Travancore. That is why we have two elephants in our logo. Secondly, we have strength in numbers - more than 2.5 lakh customers every day through our network of 5000+ plus branches, that ensure accessibility. You are never far from a Muthoot Finance branch. People sometimes take us to be a South-based brand. But, we are a national brand. We have more than 1,800 branches in the North-east and West India alone.
Going forward, what is the company's outlook on growth and diversification? What are your immediate and long term goals?
In terms of growth, we have been adding 100-250 branches to our network. Now, we are actively present in the north-eastern parts of India. By diversifying, by strengthening our digital ecosystem, we are also trying to reach out to a much younger, digitally-savvy audience from a product perspective. From a diversification perspective, Muthoot Finance is only one of the 20 diversified divisions of the Muthoot Group. We are not just a gold loan company. We are a financial supermarket. We are also into housing loans, personal loans, business loans, corporate loans, vehicle loans et al. We are into insurance, money transfer, foreign exchange; we have non-convertible debentures which are financial instruments for investment. We also help people get their PAN cards. Besides financial services, there are also non-financial divisions like leisure, hospitality, education… We have schools and colleges including an engineering college. We also have a couple of hospitals. We have a few amazing resorts in Kerala and Costa Rica. We are going into construction, power generation, plantation… We are already hugely diversified.
We would like to continue our growth trajectory - that is the only goal. Our Sunehri Soch campaign is all about people who have put their gold to productive use and the prosperity that gold has brought them. The challenge before gold loan companies is to help open up the category and the challenge for the brand is to get the maximum share of that growth in the category.
