Sundaram Home Finance has launched a new vertical, the emerging business segment, to target the affordable housing (AH) market as part of its diversification strategy. This segment will initially include small business loans (SBL) and AH lending.
Going forward, the company expects to have two primary business drivers: the Prime Housing Market, focusing on traditional housing finance, and the emerging business, concentrating on SBL and AH lending.
Sundaram Home forayed into SBL financing in October 2022 and over the first 18 months, the response has been quite satisfactory. It has disbursed over ₹125 crore to small shops and entrepreneurs in Tamil Nadu to support their working capital needs and business growth.
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“Affordable housing financing shares similar characteristics regarding loan amounts, customer profiles, market segments and geographies. We believe that the emerging business team can effectively serve the growing affordable housing and small business loans market,” said D Lakshminarayanan, Managing Director of Sundaram Home Finance.
These two businesses are being established as a separate category, with a focus on understanding customers in smaller towns who have limited reliance on formal income. Dedicated teams will address the needs of these two segments, he added.
The emerging business segment will begin with 31 branches and about 300 employees. In the near term, the company plans to open around 20 additional branches in Tamil Nadu, Telangana and Andhra Pradesh. “We plan to hire around 200 people for this segment, largely front-end staff,” he said.
The company is targeting to disburse around ₹300 crore in the emerging business segment this year.