Muthoot Finance is India’s largest and leading non-banking financial company (NBFC) that gained traction for gold loan services. People pledge gold or gold jewellery in the form of collateral, and then they can get loans quickly. Muthoot Finance started advertising for the gold loan services through TV commercials, social media, and targeted marketing. Businesses that need quick cash usually prefer this method.
Muthoot Finance has a strong grip over markets in semi-urban and rural areas due to its wide branch network and quality services. The key form of earning for Muthoot Finance is through loans, fees, and the liquidation of collateral when needed. Over the years, Muthoot Finance has held its position strong, and its assets under management have grown as well. From business revenue to profits, Muthoot Finance can grow in the competitive NBFC industry.
Here, we will learn about the Muthoot Finance Business Model, revenue sources, key insights, and much more. Let’s get started.
How is the Muthoot Finance Business Model Structured?
Muthoot Finance’s business structure is built around keeping gold as collateral for loans. In most cases, customers who pledge gold jewellery choose short-term loans, and the loan approval rate is based on the current market value of gold. A significant percentage (about 50 to 70 percent) of the collateral value is allotted as the loan amount. However, beyond gold loans, Muthoot has other financial services as well, which include personal loans, microfinance, insurance broking, foreign exchange, money transfer, and so on.
| Company/Brand | Muthoot Finance Ltd. |
| Establishment Year | 1997 (as a company; older group history) |
| Headquarters | Kochi, Kerala, India |
| Founder/Owner | The Muthoot family; George Alexander Muthoot is the MD, and promoters are largely family-owned |
| Industry | NBFC – Gold loans, financial services, microfinance, insurance broking, etc. |
| Net Worth (2025) | ~ ₹ 20,214.2 crore consolidated revenue from operations (FY25) |
| Total Revenue 2025 | ~ ₹ 5,332.9 crore consolidated profit after tax for FY25, up ~23% YoY |
How Does Muthoot Finance Make Money?
Muthoot Finance has a strong hold in India’s lending industry, and it secured its position through secure loans. As the loans are approved against collateral, customers enjoy low-interest rates on short-term loans. The following are some key strategies used by Muthoot Finance Family to earn. Let’s have a look –
1. Interest Income from Gold Loans
The primary source of revenue for Muthoot Finance is clearly visible through their tagline. Muthoot Finance earns through the interest it charges for loans. Customers bring gold jewellery as collateral in exchange for a desired loan amount. Then Muthoot gives those customers a loan up to a certain value of collateral, which also includes the current market price. As for the loan sanction, there are a few places where customers pay small fees and interest while paying the loan.
2. Fee-Based Charges and Other Income
Apart from interest, Muthoot earns through various fees it charges to customers. These charges include processing fees when someone applies for a gold loan, renewal or extension charges, late payment charges, and sometimes appraisal/evaluation fees. There is also income from other financial services, which include insurance broking, money transfer, foreign exchange, etc.
3. Non-Gold Loans
Apart from gold loans, Muthoot Finance also offers other types of loans which doesn’t require giving gold as collateral. Muthoot Finance has lending arms for microfinance, personal loans, small business loans, etc. All this became possible through small subsidiaries and NBFC arms of the Muthoot Finance family. These might be high-risk loans, but customers have to pay high interest for taking an insecure loan.
4. Auction and Collateral Liquidation
Banks and financial service providers have to deal with borrowers who fail to repay. After a due notice and grace period, Muthoot has the right to auction the pledged gold to recover the loan amount, including interest and other costs they bear. This method helps in reducing risk from defaults, and auction or collateral liquidation allows Muthoot Finance to make extra side revenue.
5. Scale, Branch, and AUM Growth
Muthoot has an extensive branch network of more than 7,391 branches across the country, which helps in reaching customers in semi-urban and rural India. With a higher number of branches, Muthoot Finance can reach more customers and grant more gold loans. Due to this, AUM grows, meanwhile the fixed costs like gold valuation operations, branch operations, infrastructure, bank office, etc, easily spread over revenue, which helps in improving margins.
Financial Performance
In FY25, Muthoot Finance has consolidated revenue from operations of about ₹20,214.2 crore, and the number increased by almost 34 percent as compared to FY24, which was around 15,061.7 crore. The consolidated net profit after tax (PAT) rose to ₹5,332 crore, up by 23.3% YoY.
What’s new in 2025?
Muthoot Finance is growing like fire with its low-interest gold collateral strategy, and it has set a key milestone of gold loan AUM of about ₹1 lakh crore in FY25. The customer acquisition of Muthoot Finance is strong, and this company has disbursed gold loans worth ₹21,888 crore to nearly 18 new customers. These numbers are all-time highs, and it is expected that Muthoot Finance will set another milestone even before the end of this year. Currently, the gold loan regulation proposals (loan-to-value, cash flow-based norms) may affect margins or loan disbursement patterns to Muthoot Finance. Apart from the regulation proposal, rising gold prices both help (higher collateral value) and may pose risks when gold price volatility is high.
