LIC Housing Finance (LICHF) will increase its focus on the affordable home segment, where it sees strong growth due to government push and growing interest among builders in this segment.

“The government is playing a key role in the development of the affordable home segment. We are also seeing big and reputed builders coming out with affordable home projects,” Vinay Sah, Managing Director and Chief Executive Officer, LIC Housing Finance, told BusinessLine here.

LICHF has asked its regional and area offices to scout for affordable housing project financing.

“Instead of builders approaching us, we have asked our people to look for builders with affordable housing projects. If we are able to get project financing, it will give us a retail lending opportunity later,” he added.

In 2016-17, LICHF did about 4,400 deals in the affordable home category. As of July this year, it has done about 3,000 deals.

“By the end of this fiscal, if we have to have a growth rate of 15-16 per cent, the contribution from the affordable segment will be 2-3 per cent,” said Sah.

The average loan size in its affordable book is ₹12 lakh. LIFHF gets about 44 per cent of its proposals from big centres — top eight cities — mainly due to higher supplies.

With a 60-65 per cent share, the salaried class forms the major chunk of its affordable loan book.

The company has been rolling out specific schemes to target borrowers in this category. In 2016-17, under the Affordable Housing Finance Scheme meant for ready-to-move in units or which are more than 80 per cent complete, the company sanctioned 16,720 loans, amounting to ₹3,996 crore. Sah said three basic conditions should be met for a borrower in this category to get subsidies.

First, it should be a first purchase. Second, income levels need to match the slabs of different housing categories — ₹6 lakh, ₹12 and ₹18 lakh. And, the area should be within 60 sq m.

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