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" Mangal Credit and Fincorp Limited MCFL a leading nonbanking financial company NBFC promoted by industry veteran Meghraj Jain has announced its entry into the loan against gold and diamond jewellery market with the launch of its maiden retail branch in the Mumbai suburbs of Vile Parle followed by the launch of five more outlets in Andheri Kandivali Mira Road Dombivali and Bhandup by March 2021The plan to enter the growing gold and diamond jewellery loan business is a natural extension of the company to leverage the promoters two decades plus experience in the fine jewellery business as well as the companys sustained success in providing loans to SME    MSME sectors since 2012Additionally the company has brought forward its plans to enter the secured loan segment for a year taking into account the possible surge in demand for assetbased personal finance in the postCOVID recovery phaseAround 75 per cent of MCFLs assets will be from gold and diamond jewellery loans while SME    MSME loans cover the remaining The average ticket size of gold and diamond jewellery loans is Rs 75 thousand with the interest rates starting from 1 per cent per month onwardsMCFL which has an equity size of Rs 1931 crore now has a loan book of Rs 6501 crore as of March 2020 which has grown by 19 per cent YoY The company expects a surge in demand in Q3 and Q4 with lockdown restrictions easing across the countryMCFL estimates an earning CAGR of 3185 per cent on AUM of Rs 150 crore over FY 20202022 The remarkable financial metrics underline the high operational efficiency in the companys business operations while maintaining zero borrowings from external market participantsMCFL has reported 79 per cent increase in its standalone net profit to Rs 1076 crore in the year ending March 2020 as compared to Rs 601 crore net profit reported in the year ending March 2019For us at Mangal Credit and Fincorp Limited the secured loan business is a natural extension of our existing portfolio with an aim to become a wellentrenched and dynamic player in the gold and diamond jewellery loan market by 2023 Our initial strategy was to commence the gold and diamond jewellery loan business next year but then we advanced our plans viewing the current situation  gold and diamonds are a rising asset class and there is good demand for these loans now With the launch of these branches we expect to cater to the needs of people in financial distress We believe that in the postCOVID period the need for assetbased personal finance will witness significant progress and with gold prices on a secular growth phase we foresee a viable business opportunity to drive growth in this segment Most of the gold and diamond jewellery loan customers are into small and medium businesses Post unlock they would require capital to restart and grow Gold and diamond jewellery is an easy loan where the disbursement process can be completed over the counter within 20 minutes Thats why salaried professionals farmers traders and small businessmen prefer this product The surge in gold prices over the last few months is also one of the factors driving individuals to monetise their unutilised gold to tide over the liquidity crisis Its been interesting to watch how the price of the yellow metal has rallied more than 30 per cent over the last six months We will raise funds through privately listed debentures and bank loans when we decide on expanding our network to Rajasthan and Gujarat next year after setting up the first few retail outlets in Maharashtra and making them operationally profitable stated Meghraj Jain Managing Director Mangal Credit and Fincorp Limited on the launchFrom an industry perspective the organized gold and diamond jewellery loan business is a lesspopulated industry with the presence of handpicked significant playersThe formal banking sector is highly focused on niche customers and their needs creating an opportune prospect for a new entrant like MCFLThe company is likely to ride the gold and diamond jewellery loan industry wave which is expected to grow at a CAGR of about 134  per cent over FY 20202022 to reach about Rs 450000 crore in FY 2022 with NBFCs leading the wayMCFLs vast network in the jewellery business in the western and northern parts of India equity funded current loan book in SME and MSME segment overall zero debt status and an ability to organically scaleup the credit business characterized by low operational risks has provided the right levers to formidably grow the gold and diamond jewellery loan businessThis story is provided by NewsVoir ANI will not be responsible in any way for the content of this article DISCLAIMERThis story has not been edited by Business Standard staff and is autogenerated from a syndicated feed             textinfo peachfunctionindex item        ifthistextmatchsThis story is provided by ANI will not be responsible in any way for the content of this article            sponsorDisclaimerTexthtmlthistext            thisremove        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