Low interest rates, increased affordability boost demand for housing loans: Manish Shah, MD & CEO, Godrej Housing Finance

Shah said for the company, which commenced operations in November last year, monthly disbursements have been growing “steadily”.

Godrej Housing Finance, the financial services arm of the Godrej Group, has garnered an average ticket size of Rs 40-50 lakh in the current financial year so far, and aims to touch Rs 3,000 crore of sanctions by this fiscal-end, said its MD & chief executive officer Manish Shah. In an interview with Mithun Dasgupta, Shah said for the company, which commenced operations in November last year, monthly disbursements have been growing “steadily”. Edited excerpts:

Godrej Housing Finance (GHF) commenced operations in November last year. What have been its experiences in terms of housing loan demands so far?

In the light of the ongoing pandemic, evolving consumer preference towards homeownership has increased the demand for residential real estate. As work-from-home became a hybrid to permanent setting, consumers were driven by ‘purchasing’ over ‘renting’ sentiment – building permanent assets. Furthermore, low interest rates, increased affordability and accessibility amongst consumers resulted in a growing demand for housing loans in our key operational markets. Another trend that burgeoned and has been instrumental in the sector’s growth has been the digital transformation.

Despite increased demand for home loans throughout CY2020-21, the customers no longer wanted to risk having face-to-face meetings. They looked for partners that provided an end-to-end seamless digital borrowing experience. This accelerated our business to pivot and offer our products to customers digitally.

How has the disbursement growing for you? What is the current average home loan ticket size? How do you see it growing going ahead?

As a new entrant in the market, launched amidst a pandemic, we have seen successful consumer acceptance and have been growing strong month-on-month. This year, we have garnered an average ticket size of `40-50 lakh, and aim to touch `3,000 crore of sanctions. We hope to sustain this momentum by focusing on the mortgage business, starting with home loans, followed shortly by Loans Against Property, and expand the product portfolio to offer Unsecured loans in the future.

What is the average monthly disbursement figure now? What are the company’s short-term and medium-term goals in terms of average monthly disbursement?

Our disbursements have been growing steadily, and presently, every month is a lifetime high. Given we are still within the first year of launch, we are eyeing to reach total sanctions of Rs 6,000 crore in the next financial year.

What is your customer acquisition plan? How are you leveraging brand Godrej to acquire new customers?

The Godrej brand has earned immaculate goodwill, built over 124 years, that instils trust in its consumers, irrespective of the business. As a conglomerate, the Group has a diverse portfolio of businesses across consumer goods, agriculture, real estate, and appliances.

We believe we have an extensive ecosystem to benefit from within the Group, as our starting point. While the Group offers us a great platform, we remain focused on delivering value and innovating in areas and on features that matter the most to customers. In line with this philosophy, to help improve flexibility and affordability for our customers, we recently launched ‘Design Your EMI’ and ‘Zero Touch Loans’. Today, after operating in the market for a year, we are confident of attracting customers who would like to take loans from a company that can be trusted and delivers on what’s being promised to them.

As some of the major banks have recently slashed interest rates on new home loans, what are your strategies to compete with them in the country’s housing loan market?

We have entered this space with an aggressive intent. Our approach is to build this business by enhancing affordability and offering home loans at competitive interest rates to our borrowers. But, there is more than just the cheapest loan the customer looks for. For the customer, the consideration to choose a financier is a combination of interest rates, payment plans and the flexibility in how they can repay the loan.

Keeping in mind the different priorities of the customer, we, at Godrej Housing Finance, keep the customer at the centre of everything we do, and we firmly believe that providing an enhanced experience should be our driving force.

Thus, as a strategy to remain relevant in the competitive lending environment, we will continue to work on our USPs, i.e., flexibility, affordability and hyper-personalisation through our product and service offerings. For instance, through our ‘Design Your EMI’ home loan feature, we enable customers to customise their equated monthly instalments (EMIs), offering them utmost affordability and flexibility.