Housing finance companies' (HFCs) assets under management (AUM) grew faster than expected at 24 per cent in the last financial year, but there was an uptick in asset delinquency, a report said today.
The faster growth, coupled with difficulties faced by commercial banks, ensured that the share of the HFCs in the overall home loan market grew by one percentage point to 43 per cent, domestic ratings agency Crisil said.
"There are two reasons for the fast growth first is the ability of HFCs to tap the massive opportunity in affordable housing, and second is the slower credit growth at banks providing HFCs the room to ramp up faster and gain market share," Crisil senior director Krishnan Sitaraman said.
The non-housing segment, which includes loan against property, developer funding and corporate loans, remains the fastest-growing segment for HFCs, raking up 30 per cent growth last fiscal, it said.
Housing shortage in the affordable segment, regulatory facilitation, entry of a large number of HFCs with sharp focus on the affordable segment will ensure that the AUM continues growing at 18-20 per cent per annum, it said.
On asset quality, it said there was a 0.30 per cent uptick in dud assets at 1.10 per cent at the end of the fiscal, adding that some HFCs are concentrating on affordable housing have had their NPAs at 4-5 per cent.
Crisil director Rama Patel explained that uptick in slippages was expected given increasing delinquencies in the loan against property segment, sharper focus on low-ticket-size home loans, and increased lending to the self-employed customer segment.
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