"We expect things to return to normal towards the end of Q2FY 21, early Q3FY21. Currently, the liquidity position is strong, with further funds expected through various steps initiated by the government and RBI. With the assistance offered by the government and the RBI, a loyal team and a loyal customer base, the negative impact of Covid-19 is expected to wane quickly," he said.
In order to generate additional revenue, MCSL, which offers financial solutions including 2-wheeler and used 4-wheeler loans, is partnering with Muthoot Fincorp Ltd (MFL), the flagship company of the group to source the gold loan business, which is the latter's core area. MCSL's team was redeployed for customer connect and cross-selling of gold loans, which resulted in earning additional revenue.
"Post the lockdown, with relaxations coming in place, collection through Muthoot Fincorp branches and other online means is increasing significantly. In the meanwhile, the disbursement will be resumed with tighter credit appraisal and additional process controls. Geo expansion has been paused and launch of new products has been pushed to the second half of the year,” said Madhu Alexiouse, chief operating officer, MCSL.
Meanwhile, Chief Financial Officer Vinod Panicker, said that in the interim, a higher delinquency could be seen leading to higher NPA figures and thereby higher provisioning/credit costs. While a lot of uncertainty prevails, based on best possible assessment, a contingency provision of Rs 18 crore has been made towards any possible impact on financials due to Covid-19. "The company is looking at actively sourcing funds through public deposits in the state of Kerala, besides speaking to banks/other investors for loans/securitization, to meet its funding requirements,” he said.