JM Financial Credit Solutions, the NBFC arm of JM Financial Group, is looking to grow its disbursements by nearly 25 per cent in FY19.

According to Gitanjali Mirchandani, Executive Director and Head, Origination Real Estate, JM Financial, the company is aiming to expand its client base and it also plans to go in for geographical diversification to grow its loan book this year.

“We currently lend to clients for projects in Mumbai, Pune, Bengaluru, Chennai, Hyderabad, NCR and Kolkata; we intend to enter some more cities in the western region such as Nashik and Nagpur. This apart, we also want to broad-base our client base by adding more companies,” Mirchandani told BusinessLine on the sidelines of a press conference to announce the company’s forthcoming issue of non-convertible debentures (NCDs).

Loan book

The company’s loan book grew by close to 30 per cent at ₹7,338 crore as on March 31, 2018, compared to ₹5,658 crore in the same period last year.

The rate of growth may look lower in the current fiscal because it is on a higher base, she said.

While real estate funding by banks has shrunk over the last three-four years, NBFCs have made a gain by lending to the sector, bridging the demand-supply gap.

According to industry sources, bank lending to the real estate sector came down from 68 per cent in 2013 to a mere 17 per cent in 2016 due to mounting NPAs.

This apart, the increasing need for funds following implementation of the Real Estate (Regulation and Development) Act, 2016, would also spur the loan demand for most NBFCs, she said.

According to a report by Crisil Research, NBFC assets are likely to grow at a compounded annual growth rate of 20-25 per cent during FY17 to FY22 due to the implementation of RERA.

“NBFCs have become more topical now due to the unavailability of bank funding to the sector,” she said.

According to Mirchandani, 50 per cent of its total loan book at present is project finance, and this is expected to increase to 55-60 per cent over the next four-five years, supported by the new real estate Act.

This apart, the NBFC also provides loan against property, loan against shares, project at early stage loans (typically where money is given at project-approval stage) and loan against land.

Related Topics