Low Interest Rates and Increased Accessibility Boost Demand for Home Loans: Manish Shah, Managing Director and CEO, Godrej Housing Finance
Godrej Housing Finance, the financial services arm of the Godrej group, has so far recorded an average ticket size of Rs 40-50 lakh during the current fiscal year, and aims to hit Rs 3,000 crore in penalties from ‘by the end of the fiscal year, said its Managing Director and CEO Manish shah. In an interview with Mithun DasguptaShah said for the company, which started operations in November last year, monthly disbursements have increased “steadily.” Edited excerpts:
Godrej Housing Finance (GHF) started operations in November of last year. What have their experiences been in terms of home loan applications so far?
In light of the ongoing pandemic, shifting consumer preference for home ownership has increased demand for residential real estate. As working from home has become a hybrid to permanent setting, consumers have been motivated by âbuyingâ rather than a feeling of ârentingâ – building permanent assets. In addition, low interest rates, increased affordability and affordability for consumers have resulted in an increasing demand for home loans in our core operating markets. Another trend that has developed and has been instrumental in the growth of the sector has been digital transformation.
Despite increased demand for home loans throughout 2020-21, clients no longer wanted to take the risk of having face-to-face meetings. They sought out partners who offered a seamless end-to-end digital borrowing experience. This has accelerated our business to pivot and deliver our products to customers digitally.
How has the payout increased for you? What is the current average mortgage ticket size? How do you see its growth in the future?
As a new entrant to the market, launched in the midst of a pandemic, we have seen successful consumer acceptance and have seen strong month-to-month growth. This year we have achieved an average ticket size of 40-50 lakh and we are aiming to hit 3,000 crore in penalties. We hope to maintain this momentum by focusing on the mortgage business, starting with home loans, followed soon by loans against property, and expanding the product portfolio to offer unsecured loans in the future.
What is the current average amount of monthly disbursements? What are the short and medium term objectives of the company in terms of average monthly disbursement?
Our disbursements have been steadily increasing, and right now every month is the peak of a lifetime. Since we are still in the first year of launch, we plan to achieve total penalties of Rs 6,000 crore in the next fiscal year.
What is your customer acquisition plan? How are you leveraging the Godrej brand to acquire new customers?
The Godrej brand has acquired an immaculate clientele, built over 124 years, which inspires confidence in its consumers, whatever the profession. As a conglomerate, the Group has a diversified portfolio of activities in the areas of consumer goods, agriculture, real estate and household appliances.
We believe that we have a vast ecosystem from which to benefit within the Group, as a starting point. While the Group provides us with a great platform, we remain focused on creating value and innovating in the areas and features that matter most to customers. In keeping with this philosophy, to help improve flexibility and accessibility for our customers, we recently launched âDesign Your EMIâ and âZero Touch Loansâ. Today, after operating in the market for a year, we are confident of attracting clients who want to take out loans from a company they trust and who keep their promises.
Given that some of the big banks have recently cut interest rates on new home loans, what are your strategies to compete with them in the nation’s home loan market?
We entered this space with aggressive intent. Our approach is to grow this business by improving affordability and offering home loans at competitive interest rates to our borrowers. But, it’s not just the cheapest loan that the customer is looking for. For the client, the consideration of choosing a financier is a combination of interest rate, payment plans, and flexibility in how they can repay the loan.
Bearing in mind the different priorities of the client, we at Godrej Housing Finance keep the client at the center of everything we do, and we strongly believe that providing an enhanced experience should be our driving force.
So, as a strategy to stay relevant in the competitive lending environment, we will continue to work on our USPs, i.e. flexibility, affordability and hyper-personalization across our product offerings. and services. For example, through our âDesign Your EMIâ home loan feature, we allow clients to customize their Equivalent Monthly Payments (EMI), offering them maximum accessibility and flexibility.