Mini Nair, CEO, Essel Finance Home Loans, ET RealEstate

June 23, 2023

NEW DELHI: The liquidity crunch that has mired the non-banking finance institutions for the past few months has had an even more severe impact on small housing finance companies, feels Mini Nair, CEO & executive director, Essel Finance Home Loans.

According to Nair, due to this liquidity crunch they have been forced to cut down or revise their business and expansion plans. “We couldn’t reach the level we had planned earlier. Hence we have now cut down our expansion plans and will wait for atleast six months to see how the market is performing.” According to her, NBFC sector which was growing on an average of 20 per cent in the last 5-6 years is expected to grow by about 10 per cent in 2019.

In conversation with ETRealty, Nair talked about how Essel Finance Home Loans is dealing with the ongoing crisis and what plans it has for 2019.

Started in February 2018, Essel Finance Home Loans has presence in Mumbai, Bengaluru, Chennai, Thane, Pune, Kolhapur, Nagpur, Nashik, Jaipur and Surat. The company carried out disbursement of Rs 40 crore during the last year and claims to have ‘0’ non-performing assets (NPAs) till date.

It operates in the affordable housing segment (Rs 5-25 lakh) and plans to continue its focus in the said segment. Currently it offer home loans at an interest rate of 13-15 per cent.

The company plans to carry out disbursement of Rs 400 crore in 2019. “In normal circumstances we would have done disbursement of Rs 200 crore in 2018 itself and would have hoped to be around Rs 700 crore by 2019-end. Now we have reduced our expectations by about 60 per cent,” said Nair.

She further adds that the last six months have been tough for them as it has been for other housing finance companies. “For past 3-4 months, most of the bigger housing finance companies almost stopped lending money which made it worse for companies like us which have just started operations.”

However all is not lost. Nair says the situation is now improving. “Now the financial institutions have started lending funds and we plan to raise funds in the next two months.” Its parent company Essel Group is also looking to infuse more money in coming months.

All the same, the funds being offered by NBFCs and HFCs are at a higher interest rate. “Earlier the interest rate was below 10 per cent, now it is about 10-12 per cent.”

Nevertheless, Nair feels there is enough and more demand for affordable housing loans, especially because of the central government’s push towards the sector and hence she expects a better growth in coming years for HFCs.

  • Published On Mar 8, 2019 at 05:28 PM IST

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