Mahindra Rural Housing Finance Ltd. sets an ambitious goal to surpass INR 20,000 crore advances book in three years.

By the end of March, the company's net loans reached INR 6,845 crore, with 30%-35% dedicated to affordable housing and the remainder allocated to rural housing.
Rural housing loans typically range from INR 150,000 to INR 300,000, primarily used for home improvement, renovation, and upgrading from kutcha houses to pakka houses. MHF aims to achieve a 50:50 ratio of affordable housing to rural housing loans in the future.

MHF’s (Mahindra Housing Finance) plans come after experiencing a slowdown during the Covid-19 pandemic. Shantanu Rege, MD and CEO, Mahindra Rural Housing Finance, acknowledged the adverse impact in FY’21 and FY’22, with total loans and income declining.

However, with improved collection efficiency and underwriting standards, FY’24 will be the first full year dedicated to growing disbursements.

While focus shifted to collections, MHF also reviewed its non-performing asset (NPA) position, improved underwriting standards, and subsequently its rejection rate on rural housing loans increased to 30%-40% of overall loan requests in the last one year.

As of March end, Mahindra Housing recorded gross and net stage-three assets of 10.46% and 7.80%, respectively. MHF aims to reduce gross NPAs to below 5% by the end of this fiscal year.

Read the full article here.