Muthoot Housing Finance targets Rs 750 crore loan disbursement in three years
Muthoot Housing Finance Corporation, which is into lending for affordable housing, is looking to disburse Rs 750 crore in the next three years in karnataka.
“There is a huge market for LIG (low income group) and EWS (economically weaker section) housing in the country with supply side improving over the years,” said Pavan Gupta, CEO of Muthoot Housing Finance. “We are targeting a disbursement growth of CAGR 60% on our current book.”
Additionally, the overall loan book for the company over the next 3 years is expected to cross 3000 crores nationally.
The affordable home segment has become a money spinner for housing finance companies, with the government’s vision of universal housing for the urban poor under the Pradhan Mantri Awas Yojna targeting building of 20 million affordable houses by March 31, 2022. Many non-banking finance companies and even the large banks have seen huge growth in this segment.
Several builders and financing companies in the country are now moving into the affordable housing segment, drawn by government subsidies and schemes like affordable housing fund, lower GST rates and increased tenure of loans under credit linked subsidy scheme (CLSS).
According to Gupta, EWS and LIG refers to people with an annual income of Rs 3 lakh, and Rs 3-6 lakh, with interest subsidy of 6.5%. “The recent government incentives has becomes a big support for people who are looking to buy their first home and not necessary has income proof,” he said.
Muthoot Housing Finance also plan to establish 12 new branches across the southern and northern regions this fiscal to tap the affordable housing market.
A government study in 2011 estimated housing shortage at 18.76 million units in urban areas, of which 96% pertained to EWS and LIG.
According to Cushman & Wakefield, the affordable segment continued its steady streak in the April-June quarter, accounting for 37% of the 26,665 units launched across top cities in the country. Select large projects were launched in the peripheral areas of Mumbai, Pune and Chennai as developers looked to tap the opportunity in this segment.