PNB Housing Finance is revamping its 'Unnati' loan portfolio to go deeper into the affordable housing segment eyeing customers who need loans of Rs 9-12 lakh, MD & CEO Hardayal Prasad said.
PNB Housing has created a small vertical under Unnati which will be different from existing Rs 18-19 lakh as affordable housing loans.
"We are setting up a whole infrastructure, we have already opened 10 more branches in June quarter. This policy on Unnati is completely revamped, this is a completely different way the business will take place. The loan ticket size will come down to about Rs 9-12 lakh as against Rs 18-19 lakh which is there today,” Prasad said.
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"So there is world of difference in the way as we plan to hit the road by September and that is where the Unnati book will start growing,” Prasad stated, adding it opened 20 branches in March 2022 quarter and more will be added going forward.
PNB Housing was never there in this loan bracket, some of the competing
HFCs offer these types of loans. "As a very large HFC it was important for us to provide full suite of services," Prasad explained further.
Promoted by Punjab National Bank (PNB), the housing finance company (HFC) has identified and mapped almost 140 districts where it will offer products under this vertical of Unnati.
"We are going to enter about 10-12 states. Whether it is Uttar Pradesh, Uttarakhand, Madhya Pradesh, Rajasthan, Chhattisgarh, Gujarat, Tamil Nadu, Andhra Pradesh, Telangana, we are going to be pan-India. We will have branches in these states," Prasad said.
The housing financier has appointed a new official who will head this vertical of the affordable housing segment. "The biggest advantage that we have with PNB is that we are across India. These are tier-IV kind of locations and we will also go to gram panchayats," he said further.
Speaking about the demand scenario, he said because of the 90 basis points increase in the repo rate in May and June, and increase in the cost of construction material, builders are saying there is a little push back in demand. There is more effort that is being made to sell a property.
The industry is experiencing a little reduction as compared to what was seen up to March 2022, Prasad said.
In the latest policy meeting last week, RBI further hiked the repo — its short-term lending rate to banks — by a steep 50 basis points, which will further jack up the interest rates.
"However, I would still say that mortgage penetration to GDP in India is around 10-10.6 percent, there is massive scope over there. And I think the government subsidy in
Pradhan Mantri Awas Yojana (PMAY), though it is no longer available, Housing for All continues to remain one of the most important objectives," he informed.
"So we want to remain very-very glued to this idea of Housing for All. That’s the reason we are entering into these (new) areas," said the official. Despite the slowdown that one is seeing because of the interest rates, there is still good potential and good demand that exist in India, he added.
In the quarter ended June 2022, the company disbursed Rs 140-142 crore under the Unnati portfolio and the asset
under management (AUM) stood at Rs 3,047 crore as of June 30, 2022.
