Top Mortgage Lender, HDFC, Sees Home Loan Demand Despite Rate Hikes

 Demand for home loans is strong in India and is expected to pick up further over the next few months, the head of major housing finance firm Housing.

Home loans have grown by 16% as of end July compared to same period last year.

"The economy is buoyant, the feel good factor is high, affordability is better so people are comfortable buying houses even if rates are slightly higher," Keki Mistry, chief executive of HDFC, told Reuters.

The central bank has already raised rates three times by a total of 140 basis points in this financial year to tame stubbornly high inflation, which has remained above the central bank's tolerance band for several months.

Lenders have passed on the interest rate rises but Mistry said that there are no signs of stress among home buyers and collections on loan dues remain robust.

Interest rates are expected to rise further with economists expecting at least another 60 basis points by March 2023, according to a Reuters poll.

"The economy feel good factor is so strong that (we) expect that festival season will be very strong," Mistry said, referring to the September to December period.

"I don't think we will see too much of a rise in interest rate going ahead, some increase will be there but don't think that will deter the buyers," he said.

Economists concur, with Madan Sabnavis, chief economist of Bank of Baroda saying in a report late last month that home buyers would be prepared for fluctuating home loan rates.

Housing loans have grown by 16% as of end July compared to same period last year, according to the latest central bank data.

Demand is likely to be particularly strong from India's larger cities, where sales had slowed between 2016-2020 but where a revival is now visible, said Mistry.

HDFC Bank will offer a 10 Second Personal Loan Service at the end of this year

 The private lender HDFC Bank is expanding its offers to self-employed people who were previously not considered creditworthy in addition to providing loans to everyone in just 10 seconds. Now, the private lender wants to raise credit exposure to customers who are self-employed, who make up barely 5% of the market.

The 10-second loan service is something that HDFC Bank, the largest private lender in India, wants to make available to everyone, even people who don’t have bank accounts. The bank has been able to provide 10-second loans for existing customers over the previous six years and has been a paradigm pioneer in this area.

By year’s end, we intend to release the product to the larger open market for personal loans after providing service delight to our current clients.

The HDFC Bank is increasing its offers to self-employed people who were previously not considered creditworthy in addition to providing loans to everyone in just 10 seconds. Now, the private lender wants to raise credit exposure to customers who are self-employed, who make up barely 5% of the market.

The private lender has 12 million pre-approved loan customers across all of its products and has established an infrastructure basis throughout 650 districts in India to disburse unsecured loans.

At Rs 1.48 lakh crore, personal loans made up the greatest portion of retail loans, while 10-second loans made up the highest portion as of the end of June 2022.