Motilal Oswal Housing Finance Ltd (MOHFL) expects to grow its balance sheet to at least ₹10,000 crore in the next three-four years through organic growth and portfolio acquisitions.

The balance sheet size of the affordable housing finance company, which is a subsidiary of Motilal Oswal Financial Services Ltd, stood at ₹3,576 crore, including loans aggregating ₹3,360 crore, as of September end 2021.

Arvind Hali, MD & CEO, MOHFL, said, “We are looking at 30-40 per cent year-on-year (y-o-y) growth. We expect that over the next three-four years, we should have a balance sheet size of at least ₹10,000 crore.”

Hali underscored that MOHFL’s pedigree, strong capital (equity share capital of about ₹600 crore and net worth of almost ₹1,000 crore), distribution network (104 branches spread across 11 States), people, processes and technology will help it achieve the targeted top-line.

“We are fairly well capitalised and our leverage (total borrowings/net worth) is only 2.5 to 3 times. So, we have a huge headroom to leverage on our own balance sheet,” Hali said.

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On the loan portfolio declining 7 per cent y-o-y to ₹3,360 crore as at September-end 2021, the MOHFL chief observed that there were repayments to some extent on account of the credit-linked subsidy scheme (CLSS) and business was subdued in the first quarter of FY22 due to the second wave of Covid-19.

“In April-May 2021, business was virtually at a standstill. But from June onwards, we have seen improvement…We have, in fact, started exceeding the pre-Covid numbers,” Hali said.

MOHFL (formerly known as Aspire Home Finance Corporation Ltd) is focussed on lending to the low-income group/ LIG (annual income between ₹3,00,001 and ₹6 lakh) and its average home loan size is in the ₹9-10 lakh range.

“We focus on customers who are self-employed, those who draw salary in cash, among others. We have developed credit underwriting competency to cater to such customers. Large part of our business is geared towards supporting self-construction whereby the customers already own land and we fund construction of the house,” Hali said.

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On the challenge of customers transferring their loan from one lender to another to get the benefit of lower interest rate, the MOHFL chief noted that this happens on both sides – MOHFL takes over other banks’ loans and they also keep taking over from it. “So, on a net-net basis, we seem to be benefiting. We are taking over more customers than we are losing them,” he said.