Aadhar Housing Finance, which caters solely to the low-income group, is exploring tie-ups with public and private banks to push home loans in six low-income States.
While the banks' network could provide the HFC (housing finance company) the reach to expand its business, the latter could help banks meet priority sector requirements, said Mr Harshil Mehta, Chief Executive Officer, Aadhar Housing Finance.
“We plan to initiate talks with banks. We are looking for opportunities in those locations where banks are not lending very aggressively,” Mr Mehta said, in an interview with
JV holdings
Aadhar Housing is a joint venture in which Dewan Housing Finance Ltd and its subsidiary DHFL Vysya Housing Finance Ltd have 80 per cent equity stake and International Finance Corporation, the remaining 20 per cent. It was launched in February 2011 and is currently operational in six locations in Uttar Pradesh and Madhya Pradesh.
The mandate that Aadhar has from IFC is to lend to the low-income group with monthly incomes between Rs 5,000 and Rs 20,000. So, it plans to focus on the six low-income States — Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Odisha, Jharkhand and Bihar.
The company plans to open 15 branches in these six States by March 2012 and service more than 45 locations through the hub-and spoke model.
Loan size
As the average ticket size of the loan in the low-income group is Rs 4 lakhs, all loans given by Aadhar would qualify for priority sector loans.
“Some of the locations we lend to may be rural, strictly going by the definition of the Government. So, some of our loans may even qualify for schemes of rural housing finance,” Mr Mehta pointed out. This, too, could help banks meet their regulatory requirements.
Since inception, Aadhar has sanctioned 600-700 loans, and disbursements are in progress. “Most of our customers take loans for self-construction. In such cases disbursements will take time,” Mr Mehta said.
This year Aadhar is looking at sanctioning 2,000-2,500 loans. At an average ticket size of Rs 4 lakh, this works out to about Rs 80-100 crore worth of sanctions.
“The demand is huge. In the six States that we plan to have our operations, we are looking at a demand of 60 lakh units,” Mr Mehta said.