LIC Housing Finance Company Limited, one of the largest housing finance companies in India, is eyeing consistent growth despite a tepid demand for home loans. The Director and Chief Executive of LIC Housing Finance Company, V K Sharma unfolded the company’s strategy to maintain the market share depite the stiff competition, in an interview with Komal Amit Gera. Excerpts:
The Reserve Bank of India cut the repo rate by 25 basis points today. Will LIC Housing Finance pass on the benefits to its borrowers? Our assest-liability management committee will review this. On the basis of its recommendation we would pass on the margin to our customers.
What is the growth target of LICHFL for 2012-13? We expect to grow at the rate of 20% in the current financial year. Our target is to register a total business of Rs 25,000 crore, of which Rs 18,000 cr has already been achieved. What is current market share of LICHFL and how do you plan to improve it? We corner close to 10% market share and perceive to sustain it. Our scheme ‘Bhagyalakshmi’ (an exclusive interest rate scheme for women home-loan seekers), may be a game-changer. We sold 3,085 schemes from January 3, 2013.
We are poised to perform better but are not in a race for market share. Is the increasing cost of borrowing resulting into higher defaults? The retail NPAs (non-performing assets) did not show any rise. The NPAs on the funds lent to developers and commercial projects have gone slightly higher. The total NPAs of LICHFL stand at Rs 400 crore. Our gross NPAs in Q2 were 0.56%. Our target is to keep the NPAs between 0.5% to 0.75%. What are your expansion plans? A. We are a pan-India player with a network of 193 marketing offices, 16 back offices and seven Regional offices. We plan to hire 100 assistants and keep hiring management trainees to consolidate our operations. There is a tremendous scope for expansion in hinterland of India but the legal mechanism, security of mortgage and government policies are the bottlencks. Our IT-based platform would help us to tap new markets.