Affordable housing player Shriram Housing Finance said its AUM or direct loan has risen by 45% so far this financial year to cross the Rs 5,000 crore mark, making it the fifth largest in the low-cost home loan segment.
The company, however, missed the two-month target due to the third wave of the pandemic, which delayed collection and disbursements. Its AUM target of Rs 5,000 crore has been set for December 2021.
Shriram Housing Finance, promoted by Shriram City Union Finance, commenced operations in December 2011 and operates approximately 100 stand-alone branches and over 200 branches within its sister subsidiaries Shriram City Union and Shriram Transport Finance. Its footprint will cross 105 own branches (up from 77 last year) and 218 kiosks by the end of this month.
Were it not for the third wave and the resulting restrictions on our operations, which impacted collections, the AUM would have already crossed the Rs 5,000 crore mark in December as expected. This will also impact the annual target of Rs 5,500 crore in direct lending, and we are now expected to close the year with Rs 5,200-5,300 crore from AUM, Ravi Subramanian, MD and Managing Director of the company based in the city, PTI told Monday. .
But, he was quick to add that the good news is that they are now the fifth largest affordable housing lender and hopefully the fourth by the end of this month.
Aadhar Housing leads the segment with a loan book of around Rs 14,000 crore, followed by Awas and Repco with around Rs 10,000 crore each, and Homefirst is slightly above Shriram’s book.
Hopefully we will overtake the current number four by the end of this month and become the fourth largest with an AUM of Rs 5,200-5,300 crore, Subramanian said, adding that this will further strengthen our position as a company in fastest growing in the segment. with the highest quality – our gross NPA fell from 5.6% to an 8-year low of 1.49% and is expected to decline further to 1.1-1.3% by the end of this quarter.
He attributed the massive improvement in asset quality to decentralized underwriting practices coupled with better customer selection, which resulted in only 7% of almost 1 lakh customers being first-time borrowers and more than that. enough focus on collection has led to collection efficiency. improving to 99.7% in December and 97% of customers paid at least one EMI in Q3.
A significant portion of the demand comes from households that belong to the lower end of the income spectrum, especially where sources of employment and income remain informal, he said, adding that they had granted loans to over 1 million customers since its inception and the average note size is Rs 16 lakh.
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