Explaining the cluster-based model, Rohan Juneja, Managing Director & CEO of TruCap Finance said “For instance, if there is a ceramic industry cluster in north Ahmedabad in Gujarat where a number of small and medium units are located, we will penetrate that area with our gold loan product. Our customers are mostly MSME units.”

Rohan said 80 per cent of TruCap's gold loan business comes from tier 2 and tier 3 cities. “Initially we were into MSME LAP loans and MSME business loans. But when Covid came we decided to give finance to the small businesses against gold. So, our gold financing business is three years old and today the overall AUM (asset under management) of the company is approximately Rs 600 crore and almost half of it is gold loan and the rest is business loan which is not backed by gold,” he said.

He further emphasised that gold loan has been an important part of TruCap's business and in the last three years the NBFC has disbursed over Rs 1,000 crores of gold loan. “Even though a gold loan is a 12 to 18 month business, the customers try to repay earlier and take their gold back. So, it gives a faster churn of your business,” he explained.

In the first nine months of FY 23, the NBFC has disbursed loans worth Rs 620 crore. “As far as the AUM is concerned, going ahead it will be equal for gold loan and business MSME loan,” the TruCap CEO said.

The NBFC is present in Maharashtra, Madhya Pradesh, Delhi-NCR, Gujarat and Goa. “We will now be entering Rajasthan and we will be focussing on tier 2 and tier 3,” he said. The ticket size of the NBFC's gold loan is Rs 1.05 lakh.

“We are expecting north of 50 per cent growth in AUM in FY24,” Juneja added.