Ravindra Sudhalkar, CEO of Reliance Home Finance, discusses his company’s strategic vision, the role of technology in their differentiation strategy, and why he believes this is the right time for middle Indians to go out there and fulfil their goal of acquiring their dream home.
BW: Ravindra, congrats on your company’s healthy $20 million net profit for last year.
Thank you. The credit of course goes to the strategic vision of leadership and overall team effort.
BW: What are your key strategic focal areas as CEO? What areas of operations have you strived to improve since you took over?
With the average age of the first-time borrower averaging around 27 years, we have focused on leveraging technology to improve both the speed of approvals for a customer and also, internally, to bring down the cost of acquiring customers while focusing on improving repayment behaviour. Going digital has allowed us to stay relevant to customers’ changing needs as well.
BW: Please tell us a bit about Reliance Home Finance’s distribution strategy. Do you see the internet playing a key role in your distribution strategy going forward?
We most definitely do. Sourcing of home loans takes place through multiple channels like our internal workforce and through our associates. After intensive discussions with our sales, credit and analytics team, we have developed a digital loan program with an aim to automate the entire home loan process to a quick, convenient and transparent journey that will transfer more power to the hands of the customers. We believe that this will help us in raising the standards of our offerings and services, for both our customers and partners.
BW: Do you follow any particular plan with respect to your target segment? Are you more focused on snagging high ticket deals or do you focus more on the low to middle income segment?
Post demonetisation, we have seen growth in the affordable housing segment. This is also where 95% of shortage of supply exists. We have always focused on affordable home loans and will continue to do so. With a large number of corporates and reputed builders entering the segment, coupled with the income tax benefits and interest subsidies given to the buyers, we see this segment growing at a CAGR of 25% by 2020.
On the consumer side, we would like to attract more first time buyers into our folds. Our digital strategy is to offer more Do-It-Yourself features in the home loan process which will certainly attract younger customers and first time buyers to the company.
BW: How do you differentiate your offering from your peers? Does technology play a key role in ensuring a seamless client experience? If yes, how?
Our focus is to manage the customer’s entire journey right from awareness to purchase and further to post purchase. This journey is enabled through a technological backbone and a seamless flow of data, which converts customer’s micro interactions to delightful moments. On the sales side, we have developed a Sales Management Tool which empowers the sales team with real-time information on customer queries leading to quicker resolutions.
Activation of eKYC has freed our customers from physical submission of document, a step further was taken when this system was integrated with the Digital Loan Platform, which now allows home loan seekers to upload or integrate their income proof, address proof and Income Tax details to get a sanction from us.
We have enabled digital analysis of bank statements through OCR (optical character recognition) thereby reducing time and improving accuracy. Process re-engineering and scorecard based decisioning has helped standardise the underwriting process thereby eliminating underwriting errors.
For the post sales process, we have developed a comprehensive solution called selfreliant.com, that allows customers to access a suite of services which until recently were done manually.
BW: As a business, what are your growth targets for the next year? How do you see the split of your book between plain vanilla housing finance, construction finance, and LAP shaping up? As a business, do you have any specific targets on your book split?
We plan to grow two times on our incremental numbers and book size. Individual Home Loans and Affordable Housing Loans will continue to remain our focus areas contributing to 55% of our book value and the overall retail loans will comprise of 75% to 77% of our book value.
BW: How do you see the housing market shaping up, especially in key metro cities, over the next 12-18 months? Is there some relief in sight for those who have been waiting patiently to book profits… or is the glut of unsold inventory still going to take time to clear up?
We believe affordable housing will be the key contributor to the growth of the real estate sector, wherein projects located in peripheral locations of the main metros will drive demand. Infrastructure is fast catching up to connect these areas and end users would not mind moving further from CBDs to fulfill their ambition of buying a home.
Given that we are a catalyst to our customers’ owing their dream home, we do not view housing as an "investment option" and hence, would refrain from commenting on the investors segment.
BW: Lastly, what would your advice to a prospective, middle income home buyer be at this stage?
Given the benign interest rates, subsidy offered by the government to the low and middle-income buyers and with the RERA bringing in more transparency and accountability to the sector, this is the right time to go ahead and fulfill one's ambition of a dream home.
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