Will housing companies and banks coexist in an expanding market?
MUMBAI: Housing is the buzzword now with housing finance companies (HFC) and banks betting big on it as the government aims to attain a "Housing for All", Prime Minister Narendra Modi’s pet project, by 2022.
But, this does not necessarily chock the growth of home loan market as it will enhance the competition benefiting the customers in an expanding market.
"HFCs and banks are the most significant players in the housing finance market," said Sriram Kalayanaraman , MD & CEO, National Housing Bank, the regulator for housing finance company. "Our view is that the market is large enough for both to coexist and grow and cater to the growing housing industry."
HFCs and banks have always coexisted. HFCs are able to bring in an involved underwriting especially on the lower segments which requires an in-depth understanding of the socio economic factors as well, he said.
In FY 2015-16, around 33 per cent of HFCs’ new booking in terms of units was for below ten lacs. Most of the new companies also want to focus on in this affordable segment.
Total 81 HFCs are currently registered with the NHB.
It has granted seven new licenses in current financial year (since July). Furthermore, six applications are currently under the process.
"We see a renewed interest in housing primarily due to the vision of the Government of achieving Housing for All," said Kalyananraman.
With the government’s effort on Housing for All under Pradhan Mantri Awas Yojana, the supply and demand for affordable houses is picking up. Under Credit Linked Subsidy Scheme, NHB has disbursed Rs. 232 crore till 31st October for 13,117 households.
Under Pradhan Mantri Awas Yojana, the Central Government has so far sanctioned projects worth Rs. 22,000 crore which works out to about a million houses.
"In our view, a house for every Indian will make all of our fellow countrymen and women span a quality of life that is immeasurable," said Kalyanaraman.
"The scale of things is huge and would involve a grand coalition between Centre, States, Urban Local Bodies, Public Agencies, Private Builders, Housing Finance Companies, Banks and customers."
"So in the medium to long term we do not see housing getting adversely impacted."
But, this does not necessarily chock the growth of home loan market as it will enhance the competition benefiting the customers in an expanding market.
"HFCs and banks are the most significant players in the housing finance market," said Sriram Kalayanaraman , MD & CEO, National Housing Bank, the regulator for housing finance company. "Our view is that the market is large enough for both to coexist and grow and cater to the growing housing industry."
HFCs and banks have always coexisted. HFCs are able to bring in an involved underwriting especially on the lower segments which requires an in-depth understanding of the socio economic factors as well, he said.
In FY 2015-16, around 33 per cent of HFCs’ new booking in terms of units was for below ten lacs. Most of the new companies also want to focus on in this affordable segment.
Total 81 HFCs are currently registered with the NHB.
It has granted seven new licenses in current financial year (since July). Furthermore, six applications are currently under the process.
"We see a renewed interest in housing primarily due to the vision of the Government of achieving Housing for All," said Kalyananraman.
With the government’s effort on Housing for All under Pradhan Mantri Awas Yojana, the supply and demand for affordable houses is picking up. Under Credit Linked Subsidy Scheme, NHB has disbursed Rs. 232 crore till 31st October for 13,117 households.
Under Pradhan Mantri Awas Yojana, the Central Government has so far sanctioned projects worth Rs. 22,000 crore which works out to about a million houses.
"In our view, a house for every Indian will make all of our fellow countrymen and women span a quality of life that is immeasurable," said Kalyanaraman.
"The scale of things is huge and would involve a grand coalition between Centre, States, Urban Local Bodies, Public Agencies, Private Builders, Housing Finance Companies, Banks and customers."
"So in the medium to long term we do not see housing getting adversely impacted."
