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
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 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
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
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.
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
- 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
Chairman & Managing Director