Billionaire M.G. George Muthoot, Chairman Of India’s Biggest Gold-Backed Lender, Dies At 71.
M.G. George Muthoot, 71, chairman of Muthoot Finance, India’s largest gold finance company, died Friday at his residence in New Delhi. Muthoot, who suffered from vertigo, lost his balance and fell down the stairs at his home. He was rushed immediately to Escorts Hospital, where he was declared dead.
A company statement to the stock exchange on Saturday noted that Muthoot was a visionary and leader whose “sudden and unexpected demise will be an irreparable loss to the company, employees, all stakeholders, family, and friends…Under his stewardship, Muthoot Finance saw new heights of growth and became the market leader in [the] gold loan industry.”
Muthoot along with his family was ranked No. 26 in the list of India’s richest people in 2020 with a fortune of $4.8 billion.
The company is India’s biggest lender against the precious metal and Muthoot is credited with building it into a financial powerhouse-with $1.3 billion (2020) in annual revenue, 5,400 branches across India and 166 tons of gold in safe custody. He expanded the Kochi-headquartered company beyond southern India, setting up branches across the country, which today serve more than 200,000 customers daily. Muthoot is credited with making the lending process transparent and customer friendly.
“Gold-pawning may be a hoary trade, but we take the credit for making it an organized business and giving it respectability,” Muthoot had once said to Forbes Asia. The company’s advertisements boasted that customers could walk into a branch with gold jewelry and walk out with cash in five minutes.
An engineer by training, Muthoot moved to New Delhi in his 20s and set up a paper mill. He later joined the family’s gold lending business in 1975, but continued to operate from the capital. He became managing director in 1979, and chairman in 1993.
The Muthoot group was founded by his grandfather Muthoot Ninan Mathai in 1887 as a trading company supplying timber and food grains to plantations that were run by the British. It expanded into financial services in 1939 when Muthoot’s father M. George Muthoot started a chit fund, a homegrown savings scheme.
Three decades later, the family got into lending using gold jewelry as security and the business was rechristened Muthoot Bankers. The company started lending to the hordes of people from the family’s native Kerala state who were looking to migrate to the Middle East for better prospects, but could not get bank financing for their travel, visa and other expenses. The family business became Muthoot Finance in 2001.
M.G. George Muthoot entered the Forbes Asia’s list of India’s richest with a family fortune of $1.1 billion in 2011 after the company’s IPO, which was oversubscribed 24 times. He was the eldest among four brothers, who together ran the business, and was treated as the group head. (Two older siblings–a brother and a sister–have not been involved with the business.) George Thomas, is the company’s joint managing director; George Jacob is a joint managing director and the youngest, George Alexander is the managing director.
For the nine months ended December 2020, the company reported a 20% rise in net profit to $383 million because of a surge in digital transactions. When the pandemic began in 2020 there was a huge rush for gold-backed loans as small businesses, strapped for cash, turned to Muthoot to borrow money. All of this fueled a 53% rise in the stock over the past year, boosting the family fortune to $5.2 billion.
The Muthoots belong to Kerala’s land-owning Syrian Christian community, and M.G. George Muthoot was a trustee of the Malankara Orthodox Church, an influential position in the community. He is survived by his wife Sarah George and two sons George M George and Alexander M George; their wives and five grandchildren.