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A thought leader reaching out to all section of the population with innovative home loan schemes: Shriram Housing Finance Limited’s Success Saga

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A thought leader reaching out to all section of the population with innovative home loan schemes: Shriram Housing Finance Limited’s Success Saga

A home is the biggest investment one can make in his life. This colossal financial commitment of owning a home is the culmination of many years of hard work and dedication. Whether one prefers a modernized urban loft or a cornered villa surrounded by beautiful woodland, most of us hope to find a dream home that feels like it was made specifically for our family. With inflation bolstering its horizon, the mere cost of owning a home has gone quite high, often making it unaffordable for the common man. This bottleneck has turned people towards housing finance companies. Today, more and more people are now employing the services and assistance of housing finance companies to realize their dreams of owning a home. The past years have seen a clear-cut hike in the demand for housing finance.

Being experimental and ambitious in its business strategies, Shriram Housing Finance Ltd. has enjoyed many successes up to this point. Stemmed out as the crown jewel from Shriram City Union Finance Ltd., the flagship company branched out from a 4 decade-old pioneer, Shriram Group in December 2011, Shriram Housing Finance Ltd. (SHFL) is a Housing Finance Company registered with the National Housing Bank (NHB) held by Shriram City Union Finance (SCUF) with 77.25% share of equity and the balance 22.75% share of equity by Valiant Mauritius Partners FDI Ltd. Counted among one of the largest diversified financial services groups in the country, Shriram Group mapped its characteristics under the leadership of R Thyagarajan, AVS Raja, and T Jayaraman, the trio that ventured into these businesses. Not many in the financial services industry thought at that time, this small Chit Funds business in Chennai would indeed be the foundation for the financial conglomerate that Shriram is today.

Going against the grain of Housing Finance Companies (HFCs’) and implementing the National Vision of ‘Housing for All’ in their ‘Shriram’ way: Finding Ways to Funding Homes

Shriram Housing Finance Ltd. takes au fait care of all genres’ dream; from the middle to higher income groups, which doesn’t have proper income documents due to their work being in the informal sectors of the economy. Shriram Housing has been leading the housing finance turf with its prowess sound home loan and other practices focused on grassroots and under-served segment of society by devising customized credit assessment methods. SHFL believes that the market and opportunities available in the housing finance domain are so huge that HFC doesn’t really need embracement to make productive use of it. The shortage in the housing unit is estimated over 2 Crore on the conservative basis. Since SHFL’s focus is on the grassroots and underserved segment, the future is very promising. It has posted a robust growth in almost every corner of the country via its network of 107 touch points across 18 states and Union Territories. Shriram Housing Finance Ltd. lives by the Corporate philosophy of Shriram Group putting ‘People first’ by providing financial assistance to ‘Aam-Aadmi’ (common man), the prospective homeowners who do not have access to the formal banking sector.

SHFL’s Expertise

SHFL understands the aspirations of the under-served segment of the society of having a home of their own and customizes its products and services to help them realize this dream of its target audience. SHFL has set up a benchmark in the home loan spectrum with its matchless services:

  • Home Loan and its variants
  • Purchase of Property: Directly from builder or in resale
  • Purchase of Plot and Construction thereon
  • Self-Construction on existing plot owned by an individual
  • Extension, Repair, Renovation of existing house
  • Balance Transfer with or without Additional Finance
  • Loan Against Property and its variants
  • Loan Against Residential Property
  • Loan Against Commercial Property
  • Purchase of Commercial Property
  • Construction Finance to Builders

Business Model

Business Model

Milestones

  • FY 2011: SHFL’s Incorporation
  • FY 2012: Registered with National Housing Bank as a Housing Finance Company in August 2011; commenced lending operations from December 2011
  • FY 2013: Private equity investment of Rs.75 crores by Valiant Mauritius Partners FDI Limited
  • FY 2014: Second tranche of investment received from our PE investor: Valiant Mauritius Partners FDI Limited. Crossed Rs. 100 Crore mark in disbursement.
  • FY 2015: Recipient of ISO 27001:2005 for the management of information security in accounting and back office operations with all associated support functions
  • FY 2016: Composite book size in excess of Rs. 1250 crores

Future Ahead

Shriram Housing Finance Limited has left an enduring mark in the housing finance and mortgage space, especially in the Tier II and III geographies. With more than 850 employees on its rolls, the company possesses more than 1,750 crores as assets under management and has grown more than 98%year-on-year, albeit on a small base. SHFL has also recorded PBT of nearly 44 Crore during the Financial Year 2016-17. Envisioning reaching the remotest corners of the country and increasing its footprints for deeper and wider penetration to ensure last mile distribution of the brand offerings and to be in sync with the Govt.’s mission of ‘Housing for All’ by 2022, SHFL’s energies are focused on strengthening its home loan portfolios as well as distribution capabilities.

Key Prowess of SHFL: The man spearheading the realm of SHFL

Mr. Sujan Sinha

(M.D. & C.E.O)

Mr. Sinha presides as the Managing Director and Chief Executive Officer of SHFL. Being a Bachelor of Science from Presidency College, Mr. Sinha has been serving the financial services domain since 1981, primarily in commercial banks, and has been involved in the housing finance industry in India since the year 2000. Mr. Sinha has also led the retail mortgage business for Axis Bank enabling it to grow exponentially. Mr. Sinha was one of the key members of the core retail team of Axis Bank (erstwhile UTI Bank), setting up and heading the retail lending business of the bank, including the retail mortgage business, for more than 7 years. He had been involved with various other retail initiatives of the bank and had served as the bank’s nominee on the boards of NBFCs in which Axis Bank had a financial stake. Having spent more than 3 decades in various banks and financial institutions, he has been a witness of both the boom and the bust times. However, that has not deterred him from pursuing his goals passionately, but without allowing any stress build-up. This, he is convinced, is the reason why he has been able to ride out the storms and, at the same time, been able to take advantage of the fair winds.

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