Flip to Housing Finance Business

When & how others will join SBI and HDFC

Flip to Housing Finance Business - When & how others will join SBI and HDFC together holding more than 60% market share.

Good news flowing from the stable of SBI with record disbursal of Rs. 1.12 lakh crore till Jan'22 against sourcing of 1.74 lakh crore and sanction of 1.24 lakh crore. (Login to disbursement of 65% is remarkable achievement) It is good omen for the industry with more than 60% business coming from hinterland. This seems to be 20% growth with more than 220 dedicated branch networks for retail assets with outstanding portfolio of 5.38 lakh crore and neck to neck leadership position holding 35.62% market share. I still remember in late 1990s and early 2000, my training program use to start with a statement that the day SBI jumps into the housing market it will be a new story for housing finance in India. It is proving right.

The bell weather and my personal choice in terms of customer service in the industry HDFC has seen a growth of 16% growth in retail assets with AUM of Rs.6.18 crore as of Dec 21.

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To me the TAT of SBI of 5 days seems to be the big story from the customer perspective. What is the big lesson?

1. The Will to do, 2. Process, 3. System and probably key would be 4. People in the system. However, we cannot forget the price advantage for bigger institutions but it is also equally difficult to move mammoth organizations which SBI, HDFC, ICICI, AXIS, BOB, LIC Housing and many more who have managed to overcome the inertia that can set-in with the size of the organization.

The key is to have skilled manpower holding to the fort for years together to understand the property, customer, legal documentation at a local market level. I think

the rest of the players should be closely looking at it from the other spectrum of affordable housing with advantage of reach and ability to understand and appraise with a focus on risk-based pricing.

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