Boost your credit score: Muthoot Fincorp CEO recommends gold loans with 6 month repayment
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For individuals seeking loans, one of the biggest hurdles is often a low credit score. Since eligibility for most loans hinges on having a good credit score, the question arises: how can one improve their credit score effectively?
“There’s a simple solution,” says Shaji Varghese, CEO of Muthoot Fincorp. “Pledge your gold and take a loan. Repay this loan within six months, and you’ll see a significant improvement in your credit score.”
He shared this insight during a panel discussion on Business Funding Solutions at the Malayala Manorama Sampadyam Kerala Business Summit 2025. India has set an ambitious target to become a developed nation by 2047.
Currently, the country’s GDP stands at 3.5 trillion dollars, but to achieve this goal, it will need to scale up to 30 trillion dollars. For this, the country has to surpass the present-day US.
The driving force behind this growth, in his opinion, is not technology or manufacturing but the Micro, Small, and Medium Enterprises (MSME) sector. “With nearly six crore MSMEs in India, even if half of them generate jobs, that’s about three crore new opportunities,” he noted. However, only 14% of these businesses currently meet the eligibility criteria for loans.
“We at Muthoot Fincorp don’t place undue emphasis on credit scores,” Varghese emphasised. The real challenge, according to him, lies in reaching the remaining 86% who are yet to qualify for loans.
To address this, loan schemes must be tailored to consumer needs. Non-Banking Financial Companies (NBFCs) are rising to this challenge with innovations like superfast loans and paperless online applications, making financing more accessible.
Highlighting another critical sector, Varghese pointed out that while 45% of India’s jobs are tied to agriculture, it contributes only 18% to the GDP. “This disparity highlights immense potential for improvement,” he said.
“Ensuring capital availability and providing capital support can unlock this sector’s growth.”Financial companies in the country have stepped up to support this process, he said.