HDFC Bank extends support for affordable housing schemes
During the early ‘80s this bank was established as a small organisation especially for providing financial assistance to low and middle income people. It was centred on President Premadasa’s housing programme in order to support it. Thereafter it became a
By Kamanthi Wickramasinghe
Housing and development is a promising sector which has achieved many milestones in Sri Lanka. Today, the HDFC Bank stands out as one of the popular banks for issuing loans specialised in housing and finance. Today this bank has meted out on a new venture to issue loans for apartment schemes which are currently under construction. Speaking about this latest venture, Upali Hettiarachchi, Chief Executive Officer of HDFC Bank shared his views about the housing and development sector, challenges and future plans.
Q HDFC Bank has come a long way since its inception. Give a brief outline about where it stands today?
During the early ‘80s this bank was established as a small organization especially for providing financial assistance to low and middle income people. It was centred on President Premadasa’s housing programme in order to support it. Thereafter it became a corporation under the Housing, Development and Finance Corporation Act during the late ‘90s. In 2003 we received our banking license and became a specialist license bank in Sri Lanka but the most importantly we focus on the housing sector. The turning point was during 2011 when we decided to diversify our portfolio to leasing, hire purchase, development loans etc.
Q What is the latest involvement between HDFC and apartment schemes?
Banking and finance has become very competitive sectors in Sri Lanka. There’s excess liquidity in the market and as a regulator the Central Bank looks after all these macroeconomic fundamentals. Yet the market liquidity is in excess, therefore all financial institutions are very competitive. The government is also planning to do huge development projects in the country such as apartments and other mega scale projects. We have joined hands with the National Housing Development Authority (NHDA) to establish a special project on affordable housing schemes in Panadura, Athurugiriya, Ragama and several other places. The government is also very concerned about the market forces therefore it is trying to give infrastructure to the developers in the market. Another important feature is that when giving a loan to build a house or for an apartment we are also giving an additional loan to buy furniture and other household items for the customers. This is another highlight in our loans.
Q Why should a customer get a loan from HDFC bank?
There are around 150-160 Business Development Assistants who are attached to branches. We can provide an efficient service using our long term expertise for the people who are interested in obtaining a home loan facility from us.these mobile banking officers make sure that the documentation is done with much convenience for the customers. The valuations and technical assistance is also provided. Nowadays we are planning to establish a separate premier housing loan centre in Colombo to attract other interested parties to our bank.
Q What are the challenges faced in this sector?
Lack of financial literacy is one of the major challenges that we face. But in collaboration with Central Bank we have introduced financial literacy programmes mainly in rural areas.
Q What are the future plans?
Most people in rural areas don’t have their own land. They either cultivate in a government land or the land belongs to someone else. Therefore the government has taken a decision to give deeds for these people to develop their lands. As a bank we think this is a very good opportunity for us to move forward. Therefore a decision has been taken to give small loans for these families to build their own houses and support them to uplift their lifestyle.