The Hindu Business Line : LIC Housing sees 25 pc growth in lending

The housing finance market continues to offer tremendous prospects. Socio-economic changes are not only rapid but also promise to sustain over time. These will have a positive impact on housing and housing finance. With this as the background, we are looking at a loan book growth of around 25 per cent.

Topline and bottomline growth are also likely to be healthy. A high rate of growth is expected from a number of centres across the country. Bangalore, Hyderabad and Chennai as well as the National Capital Region will surely feel the impact. Growth in some Tier II cities is likely to pick up too.

How are you placed to tackle this growth?

We have identified a number of initiatives. Given the kind of customer focus that we have, we constantly try to innovate and fine-tune our products. The company is streamlining procedures to make them more customer-oriented. Enhancing our distribution network is an area of importance. Technology will also play a major role.

Loans to builders are one of your specialities. What will its growth depend on?

As we have always maintained, builders are an important segment of the market since it is they who create the housing stock. In the past, we have financed a number of projects developed by some of the country's biggest builders. We will continue our association with them. With a shift in the type of projects - both residential and commercial - growth prospects will be good on this front. Please note that only those with a track record of timely completion and good quality of construction will succeed. Whether the recent increase in real estate development (in the commercial and entertainment segments) will result in an oversupply is a matter to be observed. Builders should also ensure that enhanced activity in the commercial segment does not come at the cost of residential projects. The latter will continue to be the primary growth driver.

LIC HF has recently forayed into special housing solutions for a select audience. What are your plans on this front?

LICHFL had set up a wholly owned subsidiary, LICHFL Care Homes Ltd, to conduct the business of `assisted living community centres' for senior citizens. The first such project is coming up in Bangalore. Civil construction is nearing completion.

We feel there is a big market for such projects, considering the large number of senior citizens that India is going to have in the near future. We plan to set up similar centres in Pune and Ernakulam.

Is there scope for legislative changes to facilitate growth for housing finance providers?

This is a business that requires a deep understanding of both demographics and the real estate markets. Housing finance companies will continue to do well if they have a focused approach and domain expertise. Rationalisation of stamp duties and urban land ceiling restrictions, facilitating a deeper market for mortgage-backed securitisation, introduction of mortgage credit guarantees and, above all, focus on providing good urban infrastructure can go a long way in further improving the prospects of this industry.

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LIC Housing sees 25 pc growth in lending