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Dewan Housing Finance Corporation
BSE: 511072|NSE: DHFL|ISIN: INE202B01012|SECTOR: Finance - Housing
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Chairman's Speech (Dewan Housing Finance Corporation) Year : Mar '13
Dear Shareholder''s
 
 Sectoral Overview
 
 India''s housing finance industry crossed the Rs. 7,000 billion mark
 in December 2012 and is predicted to maintain a healthy annual growth
 between 17% to 19%. Yet, the country remains extensively
 under-penetrated when it comes to housing finance. Mortgage finance
 stands at 9% of our GDP as compared to our Asian peers like China at
 20%, Korea at 26% and Western economies like the US at 80% and the UK
 at 83%. The increase in share of home finance to GDP is an indicator of
 a nation moving up the order of economic development and consequently
 shows its catalytic role in the value chain of economic activities.
 This achievement across the globe has been made possible largely by
 housing finance companies which occupy a central place in home finance
 market and operate in an enabling environment of the financial system
 of their respective countries.
 
 Housing finance is a much specialised activity requiring dedicated
 processes and people- orientation. Due to this superior sectoral focus,
 HFCs have played a significant role in India in proliferation of home
 finance, despite the dominance of commercial banks that compete with
 them with their extended reach and low-cost resources.  The playing
 field needs to be widened for HFCs as they are today constrained by
 their resources both on cost and quantum. It is therefore imperative
 for the Government and the regulatory bodies to consider an
 appropriately enabling structure and implement policy initiatives for
 HFCs so that they can be recognised as a quasi-banking entity in our
 financial system. This will be in the overall interest of
 socio-economic advancement.
 
 Having set the backdrop of the sector,
 
 I will now turn to the progress made by your Company. DHFL as an
 organisation pursues a customer-centric policy which is firmly rooted
 in the beliefs of its founder Late Shri Rajesh Kumar Wadhawan, who was
 able to visualise the potential at the bottom of the pyramid as early
 as 1984, long before the theory gained currency.
 
 I will now briefly dwell on the progress so far.
 
 The Mission
 
 The year ending March 2013 witnessed our loan book grow by 33% to Rs.
 37,000 crore, thus placing us firmly on the trajectory of the mission
 we set for ourselves to triple our loan book size to Rs. 1, 00,000
 crore by 2017. Our unwavering focus on the low and mid- income groups
 which constitute 75% of our customer base, will start paying off at a
 much faster phase, as this segment will remain at the forefront of
 reaping the gains of an expanding economy, resetting their aspirations.
 We shall remain focused on our understanding of this segment and fine
 tune our delivery capabilities as our primary strength. This will be
 the driving force in our ability to reach the goals of our mission.
 
 Customer profile - addressing the paradigm shift
 
 The customer segment that we in DHFL relate with as our core strength-
 the low and middle- income segment is in a state of continuous
 evolution. Even as one group is moving up the economic value chain, a
 new group joins the rear end. This is happening at a rapid scale across
 geographies through newer Tier- III and IV cities and across population
 groups - the agriculturist, the self- employed and the service classes.
 
 While we remain close to be labeled as the most preferred home finance
 organisation for the low and mid-income segment, we do not wish to let
 go of a customer as his /her income increases and he/she moves from the
 LMI to the higher end of the MIG or the lower end of the HIG. The
 amalgamation of First Blue Home Finance Ltd. with DHFL will help us
 firmly position ourselves in this segment. The amalgamation has been
 completed very successfully and the two brands today complement each
 other''s strengths.
 
 The challenges of remaining responsive to the growing demands from the
 bottom of the pyramid both in terms of resources and reach have to be
 addressed through strategic initiatives. A host of national programmes
 are placing disposable income at the hands of this segment and driving
 their aspiration towards a better lifestyle. The formation of Aadhar
 Housing Finance Pvt. Ltd. jointly with
 
 International Finance Corporation (IFC), to provide housing finance to
 most backward states in the country is to strengthen the DHFL Group in
 its ability to serve this segment better.
 
 We are thus well positioned to meet the emerging customer profile
 across the new class that constitutes a broader spectrum of lower and
 middle-income segment.
 
 Pioneers will remain at the front
 
 If at any time in the glorious three decades of DHFL''s operations in
 India we did a quick analysis of how we remain relevant to our
 customers, there have been two tenets that have emerged very strongly.
 Firstly, our focus on providing greater value to our customers and
 secondly, the Company''s ability to think ahead of the times.
 
 These two characteristics have been intrinsic to DHFL ever since my
 late father founded the Company in 1984.  The visionary bent of mind
 has been cascaded down to the current years of operation and all
 through the management over the past thirty years
 
 DHFL took the most difficult path of providing home finance to the
 lower income strata with limited documents to support their
 creditworthiness. We designed the framework to prove that they are
 profitable and trustworthy. We took the difficult path which few others
 dared to, till financial inclusion came to be recognised as
 indispensable for sustainable growth. We can truly be called pioneers
 in providing small ticket home loans. Our initiatives are to keep us on
 the forefront of the path on which we began our journey.
 
 Organisational preparedness
 
 At DHFL, it is this signature - the ability to extend from reality to
 possibility - that we expect will sustain our momentum.
 
 We expect to achieve our goal through a series of initiatives at the
 organizational- level to match the external environment, in the
 following areas:
 
 - Strengthening an organisational alignment, whereby every individual
 believes that the target can be achieved.
 
 - Building leaders within, transforming managers into entrepreneurs.
 
 - Stronger branding initiatives with the objective of being more
 visible across the country.
 
 - Stronger focus on growing our presence across every segment.
 
 DHFL has reached a critical mass following and from here on the growth
 phase will be exciting as even if we succeed to sustain our
 retrospective percentage growth, the value of the loan book will go up
 substantially. To manage this efficiently, we are strengthening the
 organisation with reference to the above pointers, with concerted
 effort. Thus, I am pleased to state that DHFL is at an exciting phase,
 following which its value will increase quicker, enhancing value for
 all our stake holders.
 
 1 thank all those who have been associated with the Company all through
 these years and giving us the strength to think bigger and bolder at
 every stage.
 
 Kapil Wadhawan
 
 Chairman & Managing Director
Source : Dion Global Solutions Limited
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