Hous­ing fi­nance cos eye af­ford­able hous­ing space

HT Estates - - FRONT PAGE - Mad­hurima Nandy mad­[email protected]

BENGALURU: New en­trants in the mort­gage lend­ing space are fo­cus­ing on pro­vid­ing small home­loansto­cus­tomersinci­ties and small towns, aided by scheme­san­dini­tia­tives­launched bythe­cen­tral­go­v­ern­ment­to­pro­mote 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 yearo­rareawait­ingli­cences to be­gin op­er­a­tions.

Cen­trum Hous­ing Fi­nance be­gan­lend­ing in Fe­bru­arys­tart­ing 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 ex­ec­u­tive­ofCen­trumHous­ing Fi­nance.

Cen­trumpro­videshome­loans be­tween₹5lak­hand₹40lakh, and its av­er­age loan size is ₹11 lakh. Shuk­la­saidthe­com­pa­ny­plansto have a loan book of ₹250 crore by the end of 2017-18.

Fi­nan­cial ser­vices firm Lodha Ven­tures ha­sob­tained 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 helped­bythe­var­i­ous­taxben­e­fits 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.

“We­havealigne­dour­hous­ing fi­nance busi­ness pri­mar­ily with Prad­han Mantri Awas Yo­jana be­cause­oft­wom­ain­rea­sons; one, since it will be­comepartof­build­ing 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-in­comegroup(MIG) and lower-in­come group (LIG) cat­e­gories.

Acom­bi­na­tion of fac­tors such as gov­ern­ment­fi­nan­cial and­pol­icy thrust, reg­u­la­tory sup­port, ris­ing ur­ban­i­sa­tion, in­creas­ing nu­cle­ari­sa­tion of fam­i­lies and in­creas­ing af­ford­abil­ity is con­vert­inglatent­de­mand­in­toa­com­mer­cially lu­cra­tive busi­ness op­por­tu­nity, the report said.

“...De­mand­cre­ation­largelyby re­gional or fo­cused play­ers will fur­ther boost the ex­ist­ing la­tent de­mand. Alar­ge­size of the in­cre­men­tal cus­tomer sets could be in­tro­duced to for­mal credit for the first time. This could pri­mar­ily be on ac­count of lack of cus­tomer­aware­ness­fore­l­i­gi­bil­ity 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 fromtheNa­tion­alHous­ingBank.

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