Financial inclusion is a huge business opportunity: Kapil Wadhawan

What I have learnt in the last one year of global uncertainty
While regular hikes in policy rates did increase the cost of funds for the economy and the space we operate in, if you look at the performance of the housing finance sector, then we did well

In hindsight, if one looks at what happened in 2011, the general perception is that it was a year when things went horribly wrong both on the global as well on the domestic front. However, things have not been all that bad.

While it’s difficult to maintain the healthy growth rates in the economy, especially in the globalised environment of the present day, and even though the growth rates of the Indian economy have been revised, as an economy we are still growing at a healthy rate, especially in the backdrop of what has happened globally.

While the recent Index of Industrial Production (IIP) numbers may have dipped, the bright side is that inflation too is going down. Also, these numbers need to be looked at in the backdrop of the banking regulator’s aim of tackling inflation for most of 2011. And the fact that the rate of inflation is slowing down should be seen in a positive spirit. The fact that in the recent review in January 2012 the policy rates have not been tinkered with is a testimony to that very fact. So, hypothetically speaking, if other things remain the same and inflation continues its downward trend, then 2012 will be a much better year than 2011.

Taking nothing away from the year 2011, it was a year that threw up a lot of challenges. While the regular hikes in policy rates did increase the cost of funds for the economy as a whole and the space where we operate in, if you look at the performance of the housing finance sector, then we did well.

In fact, the sector is expected to grow by around 15 per cent in 2011-12. And if you look at DHFL’s numbers, then over the first nine months of FY 2011-12 our net profit was up by 24.33 per cent, loan disbursals were up 33.56 per cent and loan sanctions were up 34.97 per cent.

The support extended to by the National Housing Bank (NHB) is certainly praiseworthy. In February 2011 we launched Aadhar Housing Finance, to reach out to the low segment with incomes ranging from Rs 5,000 to Rs 20,000, and within a year of its launch we are now present in six states (Uttar Pradesh, Madhya Pradesh, Chattisgarh, Jharkhand, Orissa and Bihar). And with financial inclusion being high on the government’s agenda, it is indeed a huge business opportunity here.

 

Kapil Wadhawan, Chairman & Managing Director, DHFL

(Kapil charted his own course after the Wadhawan family divided its businesses and interests between family members three years ago. Today, he heads one of the fastest growing housing finance companies, already third in the pecking order. But that’s not been enough. His Wadhawan Holdings has now dabbled in hospitality, retail, real estate, education and even infrastructure. The seeds of a new conglomerate have been sown.)