Gold remains one of the most valuable assets, and recently its value has shown record growth. Beyond the metal itself, the business associated with gold-backed loans (Gold Loan) has also fundamentally changed people's lives. A prime example is two Indian families—the Muthoot Finance family and the Manappuram Finance family—who entered the billionaire list thanks to this business.
These companies transformed the traditional business of issuing gold loans into massive financial empires. They capitalized on the growing demand for gold and high metal prices, transforming old practices into large publicly traded financial enterprises.
According to a Bloomberg report, the estimated net worth of George Alexander Muthoot from Muthoot Finance is valued at $9.9 billion. Meanwhile, the total wealth of Manappuram Finance chairman, VP Nandkumar, is approximately $1.4 billion. As of last December, Muthoot Finance, headquartered in Kochi, has 4970 branches across the country. Manappuram Finance's headquarters are located in Thrissur, Kerala, and the company operates over 5000 active branches.
The history of the Muthoot family becoming part of the billionaire list began in 1887, but it was not initially a gold lending business. Mutut Ninnan Mathai opened a grocery store in Kerala. After the store's success, the business expanded, and Muthoot began providing loans to farmers and plantation workers through a chit fund system.
In 1939, the family entered the gold lending sector. About four decades later, the business was divided among three sons of Ninnan Mathai. The eldest son, Mathai George Muthoot, founded the lending company that later became Muthoot Finance. According to Bloomberg, today it is the largest gold loan company in the country and the fifth largest non-banking lender by value. The company holds about 210 tons of gold as collateral, and its gold lending business grew fourfold by June, reaching $18.5 billion.
VP Nandkumar's career path at Manappuram Finance also started with traditional lending. At the age of 32, he took over the money lending business using his father's property as collateral in Valapad, Kerala. By the mid-1990s, the company was listed on the stock exchange. After this, Nandkumar focused on gold loans, expanding operations. In 2007, the company received an ICRA rating which indicated that Indian families possess between 18,000 and 25,000 tons of gold.
To develop this segment, Manappuram attracted $14 million from Sequoia Capital. Today, Manappuram is the second-largest gold lender in India, with about 3 million customers and a gold loan portfolio worth approximately $6 billion.
The operations of Muthoot and Manappuram demonstrate how an age-old borrowing method has been transformed into a modern financial service model. Both companies have built extensive commercial empires based on gold loans and have also expanded their activities into other sectors. For instance, Manappuram develops microfinance, mortgage lending, business loans, and auto loans, while Muthoot Finance has also increased its business in various areas.
