JM Financial Home Loans, the affordable housing focused lending arm of JM Financial Group, is eyeing a five-fold increase in loan book next fiscal with the co-lending tie-up it has entered into with Bank of Baroda.
JM Financial Group entered the retail home loan segment two years ago as part of diversifying its developer financing business (JM Financial Credit Solutions which is a joint venture with ex-Citi chief Vikram Pandit) -- a Rs 10,000-crore business under which it serves around 100 developers.
With co-lending tie-up it entered into with the second largest state-run lender Bank of Baroda, the company also expects to enter the premium home loan segment soon wherein it plans as against the under-Rs 10 lakh customers now.
"We expect to grow faster with this tie-up as we can lend at a competitive rate of say 8-9 per cent as this tie-up allows us to link our loan pricing to BoB's rates now as against our present rate of 11-12.5 per cent. Accordingly, I expect our book to touch Rs 2,000-2,500 crore by the end of FY21," Manish Sheth, chief executive of JM Financial Home Loans, told PTI.
Currently, its loan book is around Rs 550 crore, serving around 2,500 customers, Sheth said, who also said the claimed company has zero NPAs and is already a profitable business within two years of operations.
Sheth further said they will also be tapping the customers from those developers whom it funds now to grow the loan book.
"Another way to customer acquisition is to tap into those tens of thousands of individuals who come to our online property brokerage Dwello," he said.
On the tie-up with BoB, he said 20 per cent of the loan will remain in their balance-sheet and the rest 80 per cent will be in the books of the public sector lender.
The company has 30 branches and 300 employees, but going forward the focus will be to use technology more to widen the reach, he said.