JM financial home loans partnered for co-lending with Bank of Baroda, expects to enter premium home loans.

The affordable housing based lending arm of JM Financial Group (JM Financial Home Loans) proposes a five-fold increase in the next fiscal year’s loan book with a co-lending tie-up with the Bank of Baroda.

Two years back, as part of diversifying of its developer financing business (JM Financial Credit Solutions, the joint venture with ex-Citi Chief Vikram Pandit), JM Financial Group joined the retail home loan sector, a Rs 10,000 Crore business with approximately 100 developers.

The company also intends to enter the luxury home loan market shortly, where it plans, as against its under-Rs 10 lakh customers now, with a co-lending tie-up between them and the second-biggest state-owned lender Bank of Baroda.

“We expect to be able to grow more rapidly with this tie-up, as we are able to lend 8–9% competitively, also this tie-up will enable us to connect our loan pricing to BoB rates now compared to our current rate of 11-12.5%. Consequently, by the end of the Year 2021, I expect our book to reach Rs 2,000-2,500 crore,” said Manish Sheth, Chief Executive of JM Financial Home Loans.

At present, the loan book is roughly Rs 550 crore, serving around 2,500 clients. Sheth also said the company claimed has no NPAs and has already become a profit-making entity in two years.

Sheth further said that they will also take customers from the developers they are now financed to expand the credit book.

“Another way of acquiring clients is to take a note of the tens of thousands of people who are coming to our online Dwello property brokerage,” he said.

On the BoB tie-up, 20% of the loan stays on its balance sheet and the remainder 80% is on the public-sector lender’s accounts.

He said the company has 30 branches and 300 employees, but the aim is to use more technology to extend its scope.