New Lenders Are Worth A Look
Indian housing market has been an attractive sector for many companies to invest. It promises a significant growth opportunity from building townships to transformation to smart cities. It is moving more towards nuclear families where increases in the middle class incomes help in accelerating growth. We come across many debutants in the township or housing sector and everyone tends to offer a more breaking deal than the other, this leads it to a healthy competition. Every Time a new entrant is witnessed, his deals are better and more convincing that the previous ones. This leads us to believe that new lenders or investors bring better home deals for buyers.
As a part of a Singaporean Group called Temasek Group a new entrant in the housing market is Fullerton India Housing Finance. It is a newcomer to enter the India’s dominated market where major players like HDFC, ICICI Bank and State Bank of India have robust grounding. In February 2016, Fullerton India Housing Finance has traced plans to have around 20 branches in almost 7 states in India. It has prospective plans to adopt distribution channels, internet as well as mobile technology for steady loan application and distribution.
When there is big daddy in the market, new entrants face stiff strategic competition that might not be predictable like the stackelberg model of imperfect competitive markets. New entrants have the choice to follow their leader in the market in terms of pricing, this may be because of the aggressive plans they have for home finance market. Such leaders who have had housing finance as their prime component of business for many years now are – Reliance Home Finance, Aditya Birla Housing Finance, the Tata’s, DHFL, IIFL, Bajaj Housing Finance and Hinduja Housing Finance etc. While new entrants that have been extending their corporate arms to housing finance are Edelweiss, Muthoot, India bulls, Magma, Religare and Capital first.
With so many entrants, housing finance companies are worried about the crunch on the market. There has to be some regulation so that it does not lead to market failure. These worries but home finance companies have asked the National Housing Bank to regulate the process and suggested the implementation of a prepayment penalty in cases of which loan is repaid in the initial two years. National Housing Bank or NHB, as we know it, is an extended subsidiary of RBI. It is an apex institution for housing with the main objective of promoting housing finance institutions.
The proposition put forward by the housing finance companies has been considered favourably by the NHB, but the final call has to be made by RBI. India’s one of the leading housing finance companies, DHFL is looking forward to raise their equity by incorporating strategic partnerships. It also aims at its expansion so that new entrants might not be given as much scope to conquer and DHFL can lead as it has always been doing till now.
Housing finance companies have been helping Indians to ask for a home loan on fair grounds which usually have not been possible in the earlier times. These finance companies help you to have a home of your own and that too on easy terms. New housing lenders are making India an attractive housing finance market.