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Tag: L&T Finance

  • L&T Finance launches ‘The Complete Home Loan’

    L&T Finance launches ‘The Complete Home Loan’

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    L&T Finance Ltd (LTF) has launched ‘The Complete Home Loan’, offered through a digitised process, along with a dedicated relationship manager and optional home décor finance.

    According to the company, home décor finance aims to provide flexibility and convenience in acquiring essential furnishings for a comfortable living space.

    The loan will be given against an architect’s certificate or contract certification when the house is ready for interior decoration. It will be about 15 per cent of the entire home loan, not exceeding ₹75 lakh, and can go up to 10 years. 

    Sudipta Roy, Managing Director & CEO, LTF said, “Through meticulous on-the-ground research, we identified unmet customer needs, leading us to reimagine our existing offerings and focus on a one-stop solution for home loans. Our new TV commercials aim to boost brand visibility and effectively communicate our offerings. We are confident they will resonate with audiences, making home loans more accessible.”

    According to L&T, the dedicated relationship manager will serve as a point of contact for the customer throughout the loan process, ensuring a smooth and satisfactory experience, while the digitised process will simplify the journey of availing the loan with tech intervention. 

    Sanjay Garyali, Chief Executive – Urban Finance at LTF said, “Bengaluru is a key market for us, and through the launch of ‘The Complete Home Loan’, we are primarily targeting new home buyers seeking fresh home loans for both under-construction and ready properties.”

    “In addition to the highlighted features, key value-added features like paperless processing, hassle-free documentation, and best service standards are coupled with attractive interest rates. We believe that our tailored solutions will aid consumers in financing their additional home décor needs seamlessly,” he added. 

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  • L&T Finance inks $125-m pact with ADB to support rural India

    L&T Finance inks $125-m pact with ADB to support rural India

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    L&T Finance, one of the leading non-banking financial companies in the country, has signed a financing pact with ADB for $125 million to support financing in rural and peri-urban areas of India, particularly for women borrowers.

    The funding comprises a loan of up to USD 125 million from ADB and an agreement to syndicate an additional $125 million in co-financing from other development partners. At least 40 percent of the proceeds are allocated to women borrowers, while the rest will support farmers, micro, small, and medium-sized enterprises (MSMEs), as well as loans to purchase new two-wheeled vehicles.

    Commenting at the signing ceremony, Sachinn Joshi, Group Chief Financial Officer, L&T Finance, said, “This collaboration with ADB aligns with our core values of social responsibility. We believe this partnership with ADB is a significant step and will boost our ongoing efforts to bridge the financial gap and promote inclusive economic growth across the country. For our company, this long-term loan forms part of our continuous strategy of diversifying our funding sources. At L&T Finance, we recognise the deep impact that financial inclusion has on the communities we serve. And, through our on-lending activities in the underserved and lagging states in India, we pursue to be a catalyst for empowering individuals, especially women, farmers, and MSMEs, thus fostering economic resilience.”

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  • NBFCs maintain growth in Q1, wary of rising unsecured retail leverage

    NBFCs maintain growth in Q1, wary of rising unsecured retail leverage

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    Non-banking financial companies (NBFCs) maintained their growth momentum in Q1 FY24 led by strong demand for retail, especially unsecured, loans and a pick-up in the rural and semi-urban economy.

    Most major diversified lenders continued to post record retail disbursements in Q1 on the back of broad-based growth across segments such as housing, vehicle, SME, microfinance, gold and personal loans. Industry leader Bajaj Finance said that the growth in personal loans is across the industry and is being driven by increased penetration in tier-2 and tier-3 cities from where demand continues to rise.

    Growth is also being led by increased adoption of digital channels for distribution, which have been seeing an increase in their contribution to overall customer sourcing and revenue income, industry players said.

    Rural-focussed players such as M&M Financial Services, Shriram Finance and Satin Creditcare benefitted from the pick-up in the semi-urban and rural economy, which continues to lag demand from metros and urban locations. Here, used vehicle and home improvement loans were a significant contributor to incremental growth amid rising prices for new vehicles and housing.

    For housing finance companies, loan demand was led by the affluent and premium housing segment whereas affordable housing had a weak quarter, largely owing to the recent surge in real estate prices over the last 2-3 quarters. However, here too rural-focussed HFCs saw improving affordable home loans trends, with demand from tier-3 and tier-4 cities increasing led by economic recovery and stabilisation in rural cash flows following pandemic-linked disruptions.

    Bajaj Finance, L&T Finance and Poonawalla Fincorp are brokerages top picks amongst NBFCs that have declared their Q1 results so far.

    Margins, asset quality

    While credit growth trends were optimistic, most NBFCs saw flat margins or some amount of margin compression due to increase in their cost of borrowing. Even for deposit-taking NBFCs, cost of funds were higher on the back of deposit repricing and increased competition for deposits from banks.

    Lenders expect NIM compression to continue for at least another two quarters, with Bajaj Finance guiding for another 10-15 bps compression each in Q2 and Q3 of FY24. Mahindra Finance, IIFL Finance and other mid-sized NBFCs too have guided for an increase in their borrowing cost over the coming quarters.

    Despite stable to better asset quality for most NBFCs, provisioning requirements for these lenders increased during the quarter as they looked to boost ECL (expected credit loss) provisions and build buffers against rising leverage in the unsecured retail loan segment.

    Bajaj Finance flaggged that the pace and quantum of growth in personal loans is “troubling”, saying that the company is monitoring different aspects such as the amount of leverage, tenure and which segments are more at risk. It added that the approval rates for urban segments is about 19-20 per cent and even tighter for rural loans.

    The growth outlook for NBFCs remains strong with ICRA recently pegging it at 18-20 per cent led by 26-28 per cent growth in unsecured loans. Going ahead, NBFCs’ ability to manage the rising leverage and risks emanating from it even as try to balance their cost of funds and margins, will be the key monitorable for future earnings trajectory, analysts said.

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