Lot of demand exists in the affordable housing segment. In order to meet the housing for all by 2020, there is a direct intervention by government through various initiatives such as CLSS, tax benefits and more under the affordable housing sector. Hence, we do not see much impact on the affordable housing segment despite the overall sluggish real estate market. There has been a marginal slowdown in terms of debt funding supply because of issues faced by some of the NBFCs. However, still most of these projects continue to get funded through sales receivables.
Rajesh Sharma, Managing Director, Capri Global Capital Ltd shares insights with Sandeep Sharma about his organisation, product offerings, core competencies, and business generated in the last financial year, attractive lending rate on offer for home buyers during festival season, turnaround time in processing a housing loan application, and how affordable housing is emerging as a winner in the sluggish real estate market. Edited excerpts...
Rajesh Sharma, Managing Director
Could you tell us about your company, product offerings, and core competencies? Capri Global Capital Limited (CGCL) is a diversified NBFC with presence across high growth segments like Micro and Small Enterprises (MSMEs) Lending, Affordable Housing Finance, Construction Finance and Indirect Retail Lending. It’s been over 6 years since we started out dealing with credit to micro, small & medium enterprises (MSME). The intent is to nurture budding businesses, largely in the informal sector. Focussing on Tier II and III cities across several states in India and backed by a committed workforce of over 1,500+ employees, we have financed over 20,200+ businesses such as provision stores, retail outlets, handicrafts, restaurants, small manufacturing units, traders and other self-employed individuals, private schools and more.
CGCL believes in creating long-term relationships with all its borrowers, both in order to fully support our first-time-customers to-formal-credit customers as well as end-to-end risk mitigation. We have strived to build a more financially inclusive environment for one and all by investing in individuals who are aligned with our values and mission.
CGCL’s mission is to nurture & support every dream, however big or small. Our systems and processes have been designed to lay special emphasis on innovative young entrepreneurs who may have started small but will play a significant role in rebalancing India’s economy.
How did your company fare in the last financial year in terms of business achieved, operating profit and new clients acquired? As on March 31, 2019, the total assets of the company increased by 43.95% and stood at Rs. 4,277 Crore. The total AUM increased to 44.55% with Rs. 4,104 Crore. Capri Global has delivered robust growth in AUM for FY19 and is continuing to march for attaining 100% credit inclusion in India. We had experienced an increment in the total book size of MSME lending from Rs. 1559 Crore to Rs. 1,971 Crore during this period. We had disbursed the loans to over 5,800 customers over 84 cities in 7 states during FY19. As far as our housing finance is concerned, we did serve to over 7800 customers in 5 states - Maharashtra, Gujarat, Madhya Pradesh, Delhi NCR & Rajasthan. Given our strategic focus on women entrepreneurship and stringent customer screening, we are building a strong and loyal customer base while maintaining best in segment asset quality. We are continuing to strengthen the penetration of existing markets and intend for newer geographic expansion with a larger work force along with many more touch points in the coming years.
You have recently reduced the lending rate up to 2.5% for the fresh home loans and 1% for top-up loans. How much percentage of volume growth do you expect? Home buyers consider festive season as an auspicious time to buy properties. They not only look for special offers and discount from developers, but also look for better rates on home loan to make their purchase decision. Our festive offers have emerged as one of the biggest windows of revenue generation. We have seen our credit book increased by 45 % during this period in last financial year. Our reduced rates along with the recent slew of measures adopted by the government for affordable housing have created an opportune moment for us to harness the consumption and boost credit peak. We are positive that in this festive season also our volume will increase substantially, and we are hoping to disburse Rs. 60-70 crore loan to the potential customers.
What is the turnaround time in processing a housing loan application? Why should one go for loan from Capri and not from other established player in the home finance segment? The Housing Finance business is operated across 75 branches across 6 states. The HFC primarily serves the middle and lower middle-income population of the Tier II and Tier III cities for affordable housing. We have a customized underwriting process wherein our credit team member goes beyond the documents and understand the fundamentals of the customers housing need and assess their cash flows. The sales and credit team members visit the work premises and residence of the borrowers to engage in a discussion for assessing customer’s eligibility. We generally take 2 to 3 weeks turnaround time to process the home loan. Moreover, the business is strategically aimed at leveraging the synergies of the MSME business and expanding its product offerings to housing aspirants.
Could you provide us insights about the real estate market in the affordable housing segment? Lot of demand exists in the affordable housing segment. In order to meet the housing for all by 2020, there is a direct intervention by government through various initiatives such as CLSS, tax benefits and more under the affordable housing sector. Hence, we do not see much impact on the affordable housing segment despite the overall sluggish real estate market. There has been a marginal slowdown in terms of debt funding supply because of issues faced by some of the NBFCs. However, still most of these projects continue to get funded through sales receivables.
What more needs to be done by the Government of India to achieve its target of 'Housing for All' by 2022? The government is taking possible steps to stimulate the real estate sector and sending a clear message of the government’s priority to revive the sector and meet the goal of 'Housing for All by 2022'. We have always supported the PMAY campaign throughout and such steps are very beneficial for our customers, who can fulfil their dream of buying a home more easily, especially in Tier II and Tier III regions.