LIC Housing Finance Ltd (LICHFL) is expecting a strong growth in the current fiscal in the wake of a pick-up in disbursements, particularly in the individual loan category.
“We have seen a pick-up in disbursements in most of the regions of the country, and expect a healthy growth during this fiscal,” Sunita Sharma, Managing Director & CEO, LICHFL said here on Friday.
The company hopes to end the current fiscal with a growth of 20 per cent in its loan book. In 2013-14, it grew by 16 per cent.
She said the company was still offering loans at 10.10 per cent, among the lowest in the industry, for individual borrowers, who accounted for a major portion of its disbursements. Significant portion of its individual borrowers are middle-income salaried class people. The average loan size in individual borrower segment is about Rs.19 lakh.
Ms. Sharma said LICHFL’s net interest margin (NIM) would improve during this fiscal aided by reduced cost of borrowings and higher disbursements in LAP (loan against property) portfolio, among others.
The company intends to increase its reliance on low-cost NCDs (non-convertible debentures) and reduce its sourcing from banks, which accounted for 25 per cent of its borrowings as of March 31, 2014. It aims to reduce bank borrowing share to 20-21 per cent by the end of this year.
With this move, LICHFL expects the cost of funds to come down gradually, resulting in improvements in NIM.
It also expect the share of LAP portfolio, which gets higher margins, in the overall loan book to rise to high single digit from four per cent in Q1.
