Housing finance companies (HFCs) saw their home-loan disbursements rise 30-60% in the nine months to December 2017, over the corresponding period a year ago, driven by lending for affordable housing. Mortgage leader Housing Development Finance Corporation (HDFC), which disbursed Rs 31,992 crore between April 2017 and December 2017, 30% more than the disbursements it made during the corresponding period in FY17. The company said that of the home loans approved over the latest nine-month period, 39% in volume terms and 20% in value terms have been to customers from the economically weaker section (EWS) and low income group (LIG) segments. “The corporation on an average has been approving 8,000 loans on a monthly basis to the EWS and LIG segment, with monthly average approvals at approximately Rs 1,300 crore,” HDFC said in a post-results statement.
LIC Housing Finance saw disbursements jump 57% y-o-y to Rs 30,476 crore. Analysts, however, see this growth as an act of playing catch-up. After the company released its numbers for the December quarter, investment bank Nomura wrote that mortgage growth at the company marks a recovery from relatively weaker levels. “Loan growth was stable at 15% y-o-y but core mortgage growth has bottomed out and has been improving after weak growth in the past 12-18 months in core mortgages,” Nomura said, adding, “Core mortgages grew by 11% y-o-y vs under 10% y-o-y in the past 18 months (disbursement growth was very strong).” Companies say they expect affordable housing to drive growth in the days ahead.
Harshil Mehta, joint managing director and chief executive officer, Dewan Housing Finance Ltd (DHFL), said it remains focused on the affordable housing segment. “We are aggressively expanding our credit facilities, focusing on developing greater financial awareness for the segment and creating the right products through customisation, to become the preferred choice for home loans and deposit products for LMI (low and middle income) customers,” Mehta said. DHFL saw disbursements during April-December 2017 rise over 29% y-o-y to Rs 15,817 crore.