Hous­ing fi­nance cos eye af­ford­able hous­ing space

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Mad­hurima Nandy mad­hurima.n@livemint.com n

BENGALURU: New en­trants in the mort­gage lend­ing space are fo­cus­ing on pro­vid­ing small home loans to cus­tomers in cities and small towns, aided by schemes and ini­tia­tives launched by the cen­tral gov­ern­ment to pro­mote af­ford­able hous­ing.

New lenders such as Lodha Ven­tures, Cen­trum Hous­ing Fi­nance Ltd, JM Fi­nan­cial Ltd, Pi­ra­mal Fi­nance Pvt. Ltd and Capri Global Hous­ing Fi­nance Ltd have ei­ther started lend­ing this year or area wait­ing lic en c es to be­gin op­er­a­tions.

Cen­trum Hous­ing Fi­nance be­gan lend­ing in Fe­bru­ary start­ing with Mad­hya Pradesh, and plans to cover Gu­jarat soon .“We re­al­ized there is a huge op­por­tu­nity in Tier 3 and 4 towns where there is a lot of end-user de­mand for hous­ing loans. In the af­ford­able hous­ing seg­ment, we needed to look be­yond the tra­di­tional lend­ing model with­out com­pris­ing on col­lat­eral,” said San­jay Shukla, man­ag­ing di­rec­tor and chief ex­ec­u­tive of Cent rum Hous­ing Fi­nance.

Cent rum pro­vides home loans be­tween ₹5 lakh and ₹40 lakh, and its av­er­age loan size is ₹11 lakh. Shu kl a said the com­pany plans to have a loan book of ₹250 crore by the end of 2017-18.

Fi­nan­cial ser­vices firm Lod ha Ven­tures has ob­tained li­cence to op­er­ate a hous­ing fi­nance com­pany and plans to launch it in Novem­ber. The com­pany, plans to of­fer home loans of up to ₹25 lakh in Mum­bai and up to ₹15 lakh in other mar­kets.

“The af­ford­able hous­ing seg­ment is grow­ing very fast, and is helped by the var­i­ous tax ben­e­fits and in­cen­tives given by the gov­ern­ment,” said Lodha Ven­tures founder Ab­hi­nan­dan Lodha. “The risk to re­ward ra­tio in this space is also very at­trac­tive. We are look­ing at a buyer seg­ment which is out­side the typ­i­cal salaried class of peo­ple which is catered by large HFCs (home fi­nance com­pa­nies) and there is huge de­mand in that space,” Lodha said.

“We have aligned our hous­ing fi­nance busi­ness pri­mar­ily with Prad­han Mantri Awas Yo­jana be­cause of two main rea­sons; one, since it will be­come part of build­ing the na­tion with Prime Min­is­ter Naren­dra Modi’s most am­bi­tious project of Hous­ing For All by 2022 and se­condly, it will em­power the weaker sec­tion of the so­ci­ety who can ful­fil their dream of own­ing a house,” said Ra­jesh Sharma, di­rec­tor, Capri Global Cap­i­tal Ltd.

Af­ford­able hous­ing fi­nance is set to be a ₹6 lakh crore op­por­tu­nity by 2022, said a June 23 In­dia Rat­ings and Re­search re­port.

The re­search agency an­tic­i­pates de­mand for 25 mil­lion homes over FY17-FY22 in the medium-in­come group( MI G) and lower-in­come group (LIG) cat­e­gories.

Acom­bi­na­tion of fac­tors such as gov­ern­ment fi­nan­cial and pol­icy thrust, reg­u­la­tory sup­port, ris­ing ur­ban­i­sa­tion, in­creas­ing nu­cle­ari­sa­tion of fam­i­lies and in­creas­ing af­ford abil­ity is con­vert­ing la­tent de­mand into a com­mer­cially lu­cra­tive busi­ness op­por­tu­nity, the re­port said.

“... De­mand cre­ation largely by re­gional or fo­cused play­ers will fur­ther boost the ex­ist­ing la­tent de­mand. A large size of the in­cre­men­tal cus­tomer sets could be in­tro­duced to for­mal credit for the first time. This could pri­mar­ily be on ac­count of lack of cus­tomer aware­ness for el­i­gi­bil­ity to the for­mal credit chan­nel as well for­mal doc­u­ments. The Jan Dhan-Aadhaar-Mo­bile trin­ity could be an en­abler in this step,” the In­dia Rat­ings and Re­search re­port said.

This year, two large fi­nan­cial ser­vices firms JM Fi­nan­cial Ltd and Pi­ra­mal Fi­nance Ltd said they will en­ter hous­ing fi­nance, with a fo­cus on af­ford­able hous­ing. Both are await­ing li­cences from the Na­tional Hous­ing Bank

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