According to a senior executive on Monday, LIC Housing Finance has chosen to concentrate on the affordable housing market in an effort to improve margins and speed up loan growth.
Thus far, the mortgage lender has shown greater comfort in extending credit to well-paid clients and those with excellent credit scores. LIC Housing Finance’s managing director and CEO, Tribhuwan Adhikari, informed reporters that although the lender hasn’t been particularly active in the affordable market up to this point, it now anticipates strong demand for these loans. Generally, home loans up to ₹50 lakh fall under the category of financing for affordable housing.
“At present, affordable housing is 8-10% of the portfolio. Two years down the line it could definitely be at least 20-25%,” Adhikari stated.
Adhikari stated that although the loan book’s 5% increase may not appear impressive, LIC Housing Finance has been consolidating over the current fiscal year (FY24).
“Right at the beginning of the (financial) year, we went in for a major technology upgrade. We also conducted a major overhaul of our organisational structure. Then in August there was a change in leadership when I came in,” he added.
Adhikari continued, saying that LIC Housing Finance has chosen to exercise caution as a result of its previous failed loans and questionable choices.
“[The old platform] was doing well but was slightly constrained in adapting to new technologies. As a company we realised that the way forward was going to be digital,” he continued.
“All these things are now over and in Q4 you will see a much better growth in the loan book. FY25 is going to be the year of delivery for LIC Housing Finance. We will go all guns blazing and have given a guidance of 15% loan book growth in FY25,” Adhikari added
