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Dewan Housing Finance is a 25 Year Old Company which has continually striven to reach out the vast majority of Indians to provide them Financial Access to make a home of their own.

Dewan Housing Finance is a 25 Year Old Company which has continually striven to reach out the vast majority of Indians to provide them Financial Access to make a home of their own.

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  • 1. Problems affecting the largest number of people has the least attention paid to it
    -Aristotle

  • 2. It has been exactly the same
    in the Indian housing context

  • 3. The total housing requirement of the country is 200-225 million units
    • Current status: Available 170 million house, a shortage of approx 30-55 million.
    • 4. In next 15-20 years, additional 70 millions houses would be required
    Year 2020 - 100 million additional houses required.

    The Housing Requirement
  • 5.
    • Returns from realty in India are at an average of 14% annually. Merrill Lynch forecast India real estate sector to grow from $12 billion in 2005 to $90 billion in 2015. Housing is expected to account for nearly 90% of real estate sector.
    • 6. % share of urban population has up from 10.8% in 1901 to 27.8% in 2001 and it is expected to grow faster than rural. In 2001 more than 5000 centers identified as urban centers – 2001 census.
    • 7. By 2015, 20% (222 million) of total population will reach the 22 early 30 age bracket. Keeping 0.89% mortality rate and average size of household equal to 3, 68 million household will require independent housing—age demographic effect. Taking 30-49 age group, total demand will be much more.
    • 8. Housing shortage in India: Total housing shortage for period 2007-12, 73.96 million out of which rural housing shortage 47.43 million.

    Facts
    Source: NHB
  • 9. Segmentation of Indian Households

  • 10. Segmentation of Indian Households

    Source: National Council of Applied Economic Research, 2005
    DHFL’S Prime Customer
    Figures in brackets indicate annual household income
    Source: Business world, NCAER
    1 US$ = Rs 44
  • 11. Factors affecting housing demand
    Growth in economy
    Population Growth
    • Population > 1 billion people, 191 million households in 2001.
    • 12. Population growth has been 1.5% in 2000-2010.
    Nuclearisation
    • Primarily due to employment related migration
    • 13. It reduces the area per household but increases the overall household formation
    Housing
    Demand
    Movement in interest & home loan rates
    Movement in housing price index
    Affordability
    • Income growth: With increasing incomes the per capita floor space area increases
    • 14. Availability of finance: Increasing housing finance penetration with low interest rates drives the boom in house purchase
    • 15. Tax benefits: Principal & Interest repayment attracts customers for housing finance.
    Urbanization
    • Share of urban population has increased to 27%.
    • 16. Urbanisation reduces the area per household but leads to increasing number of nuclear families resulting in formation of more number of households

    Financial savings
  • 17. Market Scenario

  • 18.
    India still underleveraged
    India’s Mortgage/GDP ratio is lowest amongst Asian peers:
    • India’s mortgage debt in FY ‘07 stood at 6% of GDP ~USD 60 Billion on a GDP of ~USD 1 Trillion
    • 19. China @ 10%, Philippines @ 12%, Thailand @ 16%, Hong Kong @ 48%, Singapore @ 61%
    Ascending Housing Finance penetration in both urban (currently 35%) and rural (currently 7%) India due to:
    • Growth in branch network, increasing incomes, evolving demographic profile, and increasing acceptability of loans amongst customers due to high rise in property prices
    • 20. Disbursements in the last 3 years account for ~71% of the total outstanding portfolio
    • 21. Penetration is expected to go up to 41% in urban India and to 11% in rural India by FY ’12
    Data Source: CRISIL, Industry Reports
  • 22. The housing dreams of theIndian middle & lower income groups
    a challenge for the system

  • 23. The Challenge
    Accessibility
    Affordability
    • Increasing average cost of housing
    • 24. Increasing interest rates
    • 25. Regulatory issues (ULCA, Rent Control Act, Stamp Duty, etc)
    • 26. Arranging own contribution
    • 27. Credit risks : no pay slips, no tax returns, uncertain cash flows
    • 28. Absence of Clear titles
    • 29. Higher transaction costs
    An under-serviced segment finding the gap between desire & reality wider

  • 30. Every Indian must have
    Access to affordable, good quality Housing

    The DHFL Mission
  • 31. The DHFL Action
    Purpose
    Enabling access to home ownership
    Target Segment
    The low and middle income household
    Strategy
    Reach out to larger number of customers with smaller loans instead of servicing a small number of customers with large loans.

  • 32. Creating a Customer Centric Organization
    EMPLOYEE
    Technology
    PROCESS

  • 33.
    Our Core Customers
    The low & middle
    Income segments
    Comprising of groups who do not ‘fit’ into the formal frameworks of normal banks and HFC’s considered ‘risky’ by them
    They may have financial handicaps, but they have integrity & self worth
  • 34.
    Our Process
    Focus is on forging relationships with our customers
    Direct contact with customers at every stage
    business generation
    property verification
    collection and recovery
    Relationship officers in charge of every account
    Predictability of service as well as Speed of service
  • 35.
    Our Technology
    Regular up gradation of technology to ensure systems and processes deliver on time
    Integrated loan management system to service customers
    Enabling capture and retrieval of a large number of customer variables
    Facilitates building of predictive models for understanding credit behavior
  • 36.
    Our Employees
    Ordinary people who do extraordinary work
    All fired by the values of Company mission
    Periodic training & skill up-gradation in conjunction with our customer profile
    Emphasis on quality, timely delivery and resolution of consumer issues
    A robust performance appraisal system with prime focus on motivating, and career planning
    well Recognized & well Rewarded
  • 37.
    Our Products
    Developed & designed to meet the requirements of our customers :
    Commercial loans including
    • Lease Rental Financing
    • 42. Mortgage Loans
    • 43. Non Resident Property Loans
    Built in protection plans offering
    Cover for loss of job
    Life cover against accidents and untimely demise
    Property cover against natural calamities
    1st Housing Finance Company in India to offer reverse mortgage to senior citizens
  • 44. Our Reach
    An Extensive Pan–India Network
    300 locations across the country
    DHFL’s captive distribution network covers 190 locations
    Tie-Ups with Public Sector Banks provide reach to an additional 85 locations
    Acquisition of the housing finance arm of ING Vysya bank covering 25 locations

  • 45. Alliances
    Tie-ups
    Punjab & Sind Bank (“PSB”)
    Established in 1908, the Punjab & Sind bank has 905 branches / extension counters spread across India
    DHFL is presently addressing 45 locations with PSB in the states of Punjab, Haryana, Himachal Pradesh, and Jammu & Kashmir in Northern India
    DHFL intends to scale up the location coverage to 200 with PSB
    United Bank of India (“UBI”)
    Formed out of the amalgamation of four small banks of Bengal in December 1950, the Bank presently has ~1,500 branches
    UBI played a significant role in the spread of banking services in different parts of the country, more particularly in Eastern and North-Eastern regions of India
    DHFL is presently addressing 40 locations with UBI across the Kolkata and Howrah regions DHFL intends to scale up the location coverage to 500 with UBI

    UAE Exchange
    Tie – up with UAE Exchange, Abu Dhabi to reach out to the vast NRI population in the UAE & GEC Countries
  • 46. Trust Repaid
    DHFL is the second largest housing finance company in the Indian private sector
    Over 2,00,000 families
    From a modest beginning in 1984,
    Fulfilling the housing needs
    Asset
    NPA levels
    INR 6394.51Crs

    levels lowest in the industry at 1%
  • 47. Trust Repaid
    DHFL is the second largest housing finance company in the Indian private sector
    Over 2,00,000 families
    From a modest beginning in 1984,
    Fulfilling the housing needs
    Asset base
    NPA levels
    Over US $ 1 billion

    levels lowest in the industry at 1%
  • 48. Future Plans
    Boost Network
    New Products
    New Segments
    Improve Margins
    Alliances
    This is also expected to help in regional diversification of DHFL’s asset book
    DHFL is looking at cross selling of innovative consumer finance products to existing creditable borrowers
    DHFL plans to come up with various products for the self employed segments that have largely remained unaddressed by most financial institutions
    • Better capital management to reduce funding costs
    • 49. Technology to support scalability and operational efficiency

    • Diversification of regional portfolio concentration
    • 50. Ready customer base which can be exploited via cross selling initiatives and value added services
  • Business Performance

  • 51. Key Growth Parameters
    Net Interest Income
    Top Line
    Net Interest Income has grown at CAGR of 34.5%.
    Top line has grown at CAGR of 42.2% .
    Fig. in INR Mn

  • 52. Key Growth Parameters (contd.)
    Sanctions have grown at CAGR of 36.5%.
  • 53. Key Growth Parameters (contd.)
    Sanctions have grown at CAGR of 36.5%.
    Sanctions have grown at CAGR of 36.16%.
  • 54. Key Growth Parameters (contd.)
    Disbursements have grown at CAGR of 35.8%.
  • 55. Key Growth Parameters (contd.)
  • 56. Key Growth Parameters (contd.)
    PAT has grown at CAGR of 32.7%.
    Book Value has grown at CAGR of 22.1%.
    Asset Book has grown at CAGR of 38.4%.
    Borrowings have grown at CAGR of 38.7%.
  • 57. With changing Indian scenario and more dreams in their eyes, our target audience is having aspirations stoked to fever pitch.
    The
    Journey
    Has just begun