Centrum Group, a leading domestic integrated financial services group, has received the certificate of registration from the National Housing Bank to commence its housing finance business.

Centrum Housing Finance will start its operations in Madhya Pradesh (first office in Indore) by the second week of December.

“There is no Madhya Pradesh-dominated housing finance arm, unlike Gruh Finance (Gujarat) and Au Financiers (Rajasthan),” said Sanjay Shukla, the newly appointed Managing Director and Chief Executive Officer of the company.

Shukla has over 27 years of experience in the housing finance industry, and previously worked with organisations such as Centbank Home Finance Ltd (housing finance arm of Central Bank of India), TATA Capital Housing Finance, ING Vysya Bank, CitiMortgage, HDFC Ltd and LIC Housing Finance.

The company plans to initially focus on tier II and III and service the mid-income group (including self-employed) with a monthly income of up to ₹30,000 per month.

The average ticket size and rate of interest for loans will be ₹10-15 lakh and 12-12.5 per cent, respectively.

It plans to differentiate itself by offering complete transparency in transactions and advise borrowers on the basis of their demographic and income profiles.

The company sees a loan book of ₹3,000 crore in next three years (2019-end) and ₹1,000 crore by FY18-end by expanding operations to Gujarat, Rajasthan, Maharashtra (select cities), Tamil Nadu, Karnataka, Punjab and Uttar Pradesh.

It will have a total of 40 hubs in these locations, catering to 200 spokes (in the radius of 150 km from hub) in the next three years.

The company sees huge potential in the target segment (end users and not investors) and hence does not expect price correction due to demonetisation.

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