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L&T Housing Finance, the housing finance arm of L&T Finance Holdings, is looking to grow its loan book by over six times to ₹20,000 crore over the next five years by focussing more on the salaried segment and by financing developers.
Currently, the loan book of the company, which began business two years ago by acquiring Indo-Pacific Housing Finance, stands at ₹3,000 crore. At the time of the acquisition, the loan book was only ₹160 crore. Vasudevan Ramaswami, Chief Executive, said, “We aspire to take this business to ₹20,000-25,000 crore over the next five-six years. We will also increase our geographical presence to attain the target.”
The company, he added, will look to grow the construction finance portfolio, which currently stands at 10-12 per cent of the overall book.
“We would like to take construction finance to 20-30 per cent of the overall portfolio,” Ramaswami added. This will allow the company the option to tap residential buyers when the project is ready to be sold.
On the retail customer segment, Ramaswami said that the company will focus more on the self-employed non-professional segment like businessmen and entrepreneurs as working with this segment affords greater flexibility to offer innovative products.
Currently, about 65 per cent of the company’s business comes from the self-employed segment and the balance from salaried. “It is not that we are not focussing on the salaried individuals…but by definition, salaried class is a slightly low-yielding product,” he said.
E-platformTo further its retail lending, the company has also launched an e-platform. “After a consumer logs in and keys in his details, we immediately get the CIBIL score of the customer and he can walk away with an in-principle sanction. “It is one of the firsts, because the customer can walk away with the assurance that he will get this loan provided other things like documents are in place. It is a fairly powerful tool and in three months, it has given us the desired results.”
Ramaswami added that the company cannot consistently play the interest rate game and “so as a conscious effort we are bringing down the turnaround time, which is anywhere between three days for the salaried segment and about six days for the self-employed group.”
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