Vastu Housing Finance Corporation Ltd plans to enter the housing microfinance segment by partnering with SHGs across the country.
“Mortgage penetration in India is only 11% of GDP, and we are just scratching the surface of a multi-decade opportunity.
“So in the process of increasing mortgage penetration, there’s a lot of micro-housing to do,” said Sandeep Menon, founder, CEO and CEO of Vastu Housing Finance Corporation. Line of business.
He stressed that the affordable housing finance company, which currently has an average home loan ticket size of around ₹12.5 lakh, is working with SHG to grow the home micro loan portfolio (from ₹3 lakh at ₹6 lakh ticket size).
An SHG is a homogeneous group, made up of 15 to 20 women members, who first pool their savings and make small loans to needy members. Once the SHG successfully undertakes savings and credit operations with its own resources, it can borrow from a bank or microfinance institution to enhance its resource pool.
As of March 31, 2022, around 67.4 lakhs of SHG had an outstanding portfolio of ₹1,51,051 crore, according to MFIN data.
“Almost every home loan we make, a woman is either the borrower or the co-borrower. We generally encourage this,” Menon said. If the lady of the house is a borrower, the delinquency rate is lower.
The Vastu boss said that although his company is predominantly an affordable home loan provider, if a client wants a larger home loan (₹60 lakh to ₹1 crore), the same is extended through a co-lending deal. with ICICI Bank.
assets under management
In its rating justification for Vastu, ICRA noted that the housing finance company’s assets under management (AUM) stood at ₹4,507 crore as of December 31, 2022 (₹3,372 crore as of March 31, 2022 ).
Menon expects Vastu to end FY23 with AUM of around Rs 6000 crore.
Investors in Vastu, which began operations in August 2015, include Multiples Alternate Asset Management, Norwest Venture Partners, Creation Investments Capital Management LLC, IIFL Asset Management, Pramod Bhasin and Vikram Gandhi.
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