Organizational Context
Key Aspects:
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Part of the Aditya Birla Capital Limited, Aditya Birla Housing Finance Limited (ABHFL) is registered with the National Housing Bank as a housing finance company under the National Housing Bank Act, 1987. The company offers a complete range of housing finance solutions such as home loans, home improvement and home construction loans, balance transfer and top-up loans, loans against property and construction finance. The company acquired its license on 9th July 2014 and has aggressive growth plans.
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ABHFL has grown at a steady rate while reporting good asset quality despite challenges in the operating environment. While the industry is dominated by five large groups, there has been an emergence of segment like affordable housing and self-employed borrowers, given the high potential in these segments. Despite increased focus by banks, HFCs have been able to maintain their share in the mortgage market and is poised for rapid growth and plans to grow 5X (40,000 Cr) in the next 5 years. This shall take ABHFL within the top 5 percentile of HFCs in the country.
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The ABHFL Sales organization works broadly with 3 customer segments – retail (individual) customers, institutional customers (for retail and institutional loan consumers) and builders (for both retail tie-ups and construction finance), with a major share of the business coming from retail customers. Client segments can also be divided into Salaried and Self-employed, with both of these having very different preferences and needs.
Job Context
Key Aspects:
In construction finance, underwriting focuses not on the balance sheet but significantly on the project and the promoter group. Assessment here involves understanding the previous track record of the builder in terms of quality and timeliness of completion, saleability of projects, track record with other lenders and no. of projects delivered in the past. Project monitoring and end use of funds disbursed are critical here given risks around funds being used elsewhere, sale receivables not coming to the lender as a repayment and so on. Prudent customer selection is critical and is highly dependent on a relationship manager’s market awareness and client background information.
. Financing solutions are provided to Self-Employed [professionals/ non-professionals/ salaried] against a wide array of lending programs, each of which aims to estimate the client’s repayment capability accurately before the company to take an exposure. The lending program requires assessing clients on various dimensions, including income, repayment behavior, stability of income/ residence, profile, collateral [valuation, marketability], ownership structure of business and the property and many others.
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To help in creating a not only Monitoring Strategy plan for the region/location but also implementing the same aimed at effective risk management and customer service.
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To establish effective repository of day to day project data, updating the same on real time basis to overcome any stress signal in the specific case to help in creating book of desired size for the region.
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Considering highly dynamic market segment, Person should constantly increase and upgrade local market, financial & operational know how on industry dynamics.
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Effective relationship building and efficient real time processing of information for maintaining relationships with multiple stake holders in the organization including sales, credit, risk, compliances, operations, banks and customers while ensuring portfolio health and quality.
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Loan approvals entail a good mix of profile checks, balance sheet lending and collateral assessment.
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In-depth understanding of the customer’s business model, customers & suppliers, success factors and dependencies needs to be taken into account given these are long term exposures [ranging upto 15 – 20 years].
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The financials are assessed to understand the repayment capability in the near and long term.
Key Challenges
- Being one of the most preferred asset classes in the lending space today lends this business the immense challenge of competing with all FIs / banks in a highly price sensitive target segment.
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Collateral assessment is another complex part of the underwriting process involving checking the structural stability, marketability, valuation, regulatory / local body compliance and legal veracity – all to ensure the property can be liquidated to repay the loan if required in case of customer default.
Enabling Skill Sets & Qualifications
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The critical skill sets required to meet these challenges are Building builder relationships, past experience in Real estate debt or equity business credit and project monitoring, superior analytical, communication & presentation skills and Real estate market network.
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The education & experience required to fulfil this profile are a graduate (Graduate/ Post graduate MBA) with minimum 3 to 5 yrs of experience in Real estate lending space and monitoring.
