LIC Housing Finance (LIC Housing) is offering borrowers extension on loan term to ease the burden of high interest rates, managing director and chief executive officer Y Viswanatha Gowd said.
“Interest rates have increased by almost 200 bps and EMI has definitely gone up. So, we have accommodated borrowers by extending their term. We are also providing relaxations on processing fee in selected categories,” he said.
The non-bank lender is offering these concessions to both existing as well as new borrowers.
The interest rate on home loans has risen sharply in recent months, with the Reserve Bank of India hiking the repo rate by 250 bps so far in the current rate hike cycle. Due to this, equated monthly instalments (EMI) have sharply increased.
In the March quarter, LIC Housing Finance’s total disbursements fell to Rs 16,027 crore, from Rs 19,315 crore a year ago. This was due to a decline in disbursements in the individual home loan segment.
“The overall book size has increased 10% on a cumulative basis. Disbursements reduced in Q4 as the northern and eastern regions could not reach the expected levels. Otherwise, the demand was very good across geographies,” he said. Additionally, a higher base in 2021-22 (April-March) and high interest rates have also led to the fall in disbursements in the quarter under review.
The company expects its individual home loan book to grow at a compound annual rate of 12-15% in 2023-24. It also sees gross NPAs to falling by around 20% by March 31, 2024.
The average ticket size of its loans is around Rs 27-28 lakh.
While LIC Housing continues to focus on the affordable housing segment, it is also exploring new products like lease rental discounting loans. “This year, we have ramped up presence across tier-II and III cities by expanding the network with addition of area offices. That gives us some good cushion and leverage. We will get some extra growth from that,” Gowd said.