Eyeing consistent growth despite tepid demand for home loans: V K Sharma

Q&A with director, chief executive, LIC Housing Finance Company

LIC Housing Finance Company Limited, one of the largest housing finance companies in India is eyeing a 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 marke share depite the stiff competition in an interview with Komal Amit Ger The excerpts are as under:

The Reserve Bank of India cut the repo rate by 25 basis points today. Will the borrowers of LIC Housing Finance get the benefit of this?

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 the year 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 cr out of which, Rs 18,000 cr has already been done.

What is current market share of LICHFL and how do you plan to garner a higher market share?

We corner close to 10% market share and percieve to sustain it. Our scheme ‘Bhagya Lakshami’, (an exclusive interest rate scheme for women home loan seekers) may be a game changer. We sold 3085 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 400cr. Our gross NPAs in Q2 were 0.56%. Our target is to keep the NPAs between 0.50 to 0.75 points.

What are your expansion plans?

We are a pan India player with a network of 193 marketing offices, 16 back offices and 7 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.

The IT based platform would help us to tap the new markets.