Rupinder Singh, Managing Director and Chief Executive Officer, talks about the growth journey of the affordable segment focused HFC
FinTech BizNews Service
Mumbai, December 8, 2023: India Shelter Finance Corporation (ISFC) has high yields, and granular, retail focused portfolio. Rupinder Singh is the Managing Director and Chief Executive Officer of the India Shelter Finance Corporation. He has an extensive experience in the finance sector. He was previously associated with Cholamandalam Investment and Finance Company Limited as senior vice-president and business head, HDFC Bank Limited as senior vice-president and GE Money Financial Services Limited (formerly, GE Countrywide Consumer Financial Services Limited) as regional sales manager. He holds a post graduate diploma in business management from FORE School of Management, New Delhi. Rupinder Singh talks about the growth journey of the IPO bound Company in an exclusive conversation with the FinTech BizNews website.
Mehul Dani: India Shelter Finance Corporation has one of the fastest growing assets under management among housing finance companies in India. Can you can you give some insights as to which are the strengths that you have built upon? Which are the strengths that you would like to bring it to the notice of prospective investors?
Rupinder Singh: So, one is we do direct sourcing. We don't depend upon third party intermediaries. We directly get in touch with customers. Number two, we have a right blend of technology and people. It has a right blend or not physical, but phygital, you can see processes are very strong. We have a concept of maker checker in terms of process. Speed is the key for us. So, we give one of the best turnaround times in history. From login to sanctions and from sanction to disbursement. So, where are we today is again an improvement from the previous 15 days for disbursal to 13 to 12 to 11 days and now to seven days. The next target is how can we can bring to six days and each day will count in that sense. Six days from login upto disbursements. That is the next target that we will take on internally that we want to promote down the line and we want to see where some hiccups happen, which we can remove so that the ease of the business keeps improving day in and day out.
We are technology and analytics-driven company with scalable operating model; we have robust underwriting, collection and risk management systems; diversified financing profile with a demonstrated track record of reducing financing costs; and experienced management team supported by qualified and experienced personnel.
Which are the other strength areas that you want to harp upon.
Rupinder Singh: So, second is our distribution and productivity. We are one of the players, who operates in 15 states nationally. So, risk has been diversified in very focused way in that sense that it should not be a state focused company, where anything happens and you don't have any fallback option or nursing. So that risk is largely diversified. The model is again a branch model very near to customer. So, we put a process in a state that gets replicated easily in other states also by virtue of the processes and systems that we have built.
This model includes our “feet-on-street” approach for physical onboarding of customers through a network of more than 1,500 relationship managers as of September 30, 2023, along with digitization of customer onboarding across loan origination and banking processes.
When you speak of going near to customer, having more manpower plus deployment of technology, resources, all those things come. How do you manage on both, rationalising cost, but increasing the reach?
Rupinder Singh: We keep an eye where we see the market is operating well and we can get good returns quickly. This is the first option we will be relying on basically.
The concept of branch happens where the market is available and one should not have gone haywire. So, when most of the branches, do breakeven in eight to nine months. Planning has to be done, we know that every year we have to reduce the cost. We have extensive and diversified Phygital distribution network with significant presence in Tier II and Tier III cities.
We expect 35 to 40 branches have to be added, although if you want you can do as many as 70. Adding 30 to 40 branches has been the history so far. We have even reached the level of 70 to 80 branches in a year.
Today we have 200 branches and we will double this number in the next four years.
How you've been able to keep the asset, quality, clean what strategy has gone into that?
Rupinder Singh: For us first and foremost important thing is the sourcing. If your sourcing is good, automatically those hassles go away. So, this is the reason we train our people and that is in house. There is no third party integration. The people who actually are with us for a long time, who want to go with us for a long time they are given this charge of sourcing. We are in regular touch with customer directly from day one. That is the biggest focus area which helped us improve the sourcing. Number two, every customer is being met by our credit manager. He does a detailed discussion, analysis of documents, analysis of his income and underwriting on pieces of that. Number three, the title has to be clear and income has to be low and every collateral has to be verified by in-house technical manager. So, what we see the title should be name of an individual that is paramount and they should be registered titles. If registered title is in the name of an individual, then automatically mortgage can be charged over that piece. So, we feel the title should be in such a way in case of any eventuality. Something happens, the law which has been given by the authorities can be imposed, because of the title is very complex. So that meets the requirement. So, whatever the law permits, we go under that purview. And on basis of that only the legal has been taken care and once it is clear, we are able to find the way ahead.
Give some description of the business model that you have followed? What will be your vision in future factoring the new challenges. What could be the change adjusting to the fast-changing scenario, from a regulatory perspective, from business sentiment perspective how you're going to pitch your vision to the customers, influencers and investors?
Rupinder Singh: We maintain transparency with the customer, from point of login, till the disbursement time. With every customer, we encourage them to visit our branch at a time of final loan documentation. So that all terms and conditions are very clear at that moment. We give loans to the family, not to the individual, which means every loan has a woman as an applicant. We have been building capacity month on month in the same direction basically and we want to be a strong housing finance company.
Our Strategies include to further grow and diversify our distribution network to achieve deeper penetration in key states and drive sustainable growth. We will leverage our technology stack to achieve scalability, improving efficiency and productivity of our existing branches, diversify borrowing profile and optimize borrowing costs. We will enhance brand equity and foster sustainability.
