Sticking to the Housing for All agenda, PNB Housing has revamped its ‘Unnati’ loan portfolio to offer Rs 9-12 lakh as affordable loans which will be different from the existing Rs 18-19 lakh.
According to MD & CEO Hardayal Prasad, PNB Housing Finance is redesigning its “Unnati” loan portfolio to expand into the affordable housing market and target consumers who require loans between Rs 9 to 12 lakh. A minor vertical under Unnati that will be distinct from the current Rs 18–19 lakh affordable home loans has been formed by PNB Housing.
They are establishing a complete infrastructure. In the June quarter, they have already opened 10 more branches. This new Unnati policy represents a fundamental change in how the business will be conducted. The loan ticket size will decrease from the current Rs. 18–19 lakh to around Rs. 9–12 lakh.
Pan-India branches
There is a world of difference in the way they aim to hit the road by September, and this is where the Unnati book will start expanding, according to Prasad, who added that 20 branches were established in the March 2022 quarter, and more will be added in the future.
These types of loans are offered by some of the rival HFCs, although PNB Housing has never been in this loan category. Prasad explained that as a very large HFC, it was critical for them to deliver the whole spectrum of services. The housing finance company (HFC), which is promoted by Punjab National Bank (PNB), has identified and mapped over 140 areas where it will sell products under this Unnati vertical.
They plan to enter about 10 to 12 states, pan-India, whether it be in Uttar Pradesh, Uttarakhand, Madhya Pradesh, Rajasthan, Chhattisgarh, Gujarat, Tamil Nadu, Andhra Pradesh, or Telangana. They have decided to establish branches in these states.
The new official who will lead this division of the affordable housing sector has been appointed by the housing financier. The fact that PNB is spread out across India is the biggest advantage they have. They will visit gram panchayats as well as these tier-IV areas.
Speaking of the demand environment, he stated that builders are claiming there is a slight pushback in demand as a result of the repo rate increasing by 90 basis points in May and June as well as an increase in the cost of construction materials.
The effort put forth to sell a property has increased. According to Prasad, the industry is facing a slight decline from what was observed up through March 2022. The RBI increased the repo, its short-term lending rate to banks, by a hefty 50 basis points at its most recent policy meeting last week, which will significantly raise interest rates.
Housing for All
However, Prasad still maintains that given India’s mortgage penetration to GDP, which is around 10–10.6 percent, there is a tonne of room for growth there. And although the government subsidy for the Pradhan Mantri Awas Yojana (PMAY) is no longer available, he believes that one of the most crucial goals is still to provide housing for All of Us.
As a result, the official stated, they wish to stick rigidly to the concept of a Housing for All. This is the reason they are entering these new areas. He went on to say that India still has good potential and good demand notwithstanding the downturn brought on by interest rates.
The asset under management (AUM) was Rs 3,047 crore as of June 30, 2022, and the company spent between Rs 140 and Rs 142 crore on the Unnati portfolio for the quarter that ended in June 2022.
