Strong Demand for Affordable Homes to Drive Growth, says MD

Mumbai-based Khush Housing Finance is planning to more than double its loan portfolio to ₹250 crore in FY18 on the back of strong demand for affordable housing from those belonging to the economically weaker sections and low-income groups, said MD and CEO Amit Magia.

The housing finance company, which gives loans to, among others, hawkers, auto rickshaw drivers, domestic help, and shopkeepers, has disbursed close to ₹100 crore since it began lending operations in January 2016.

Magia emphasized that his company’s loan appraisal not only mitigates the risks but identifies and rates the borrower’s creditworthiness despite technical bottlenecks such as lack of documentation and income proof.

He elaborated that the company focuses on offering affordable housing finance solutions to the economically-weaker sections and urban poor who are usually ignored by traditional banking institutions owing to lack of documentation, income proof, and residential proof.

“Close to 54 percent of our portfolio is covered by the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awaas Yojna (PMAY). This means that these eligible customers receive interest subsidy under the PMAY of approximately ₹2.20 lakh per customer.

“Effectively, this would mean that the EMI (equated monthly installment) payable by these customers covered under CLSS will be much less, with their loan outstanding coming down by the subsidy amount,” said Magia.

Branch Expansion

Khush Housing Finance, which currently has 13 branches (eight in Maharashtra, three in Gujarat and two in Rajasthan), is planning to set up 30 offices across the country in the next three years.

“We are looking to scale up business in a big way and are targeting a ₹5-crore business per branch/per month,” said Magia.