Housing finance companies are relying heavily on self-employed and self-employed clients, especially in the affordable housing segment.
On Monday, Shriram Housing Finance launched festive offers for non-salaried mortgage borrowers. The company has reduced the processing fee by 0.50% and is offering a 0.50% interest rate reduction for online mortgage applications.
“Shriram Housing Finance caters to a mix of affordable and mid-size home loan segments, and the majority of our clients are non-salaried, where we are seeing renewed demand for home purchases,” said Ravi Subramanian, Managing Director and CEO of Shriram. Housing finance. The appetite for buying homes is more than it was before the pandemic in Level II and III cities, he added.
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In general, banks tend to favor salaried clients for mortgage disbursements.
Arvind Hali, Managing Director and CEO of Motilal Oswal Home Finance, said the country has a significant number of self-employed workers, nearly 99% of whom are in the unorganized sector. “There is huge potential for housing demand in this segment,” he said, noting that many now prefer to own and stay in independent homes.
“Over the next two years our portfolio would be 60-65% in favor of independent clients,” he said, adding that risk-adjusted returns may be more rewarding in the segment.
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At present, the company’s book is also balanced between salaried and self-employed clients.
Motilal Oswal Home Finance has a book size of around 3,600 crore and is looking to grow 30-35% over the next several years.
Agrim Housing Finance also focuses on the self-employed segment, with 85 percent of its clients being micro-business owners and the rest are employees.
“Over the next few years, 95% of our loan portfolio will be devoted to informal and self-employed workers,” said Malcolm Athaide, CEO and co-founder of Agrim HFC.