Birla Home Finance to spread in 20 cities

Birla Home Finance Ltd (BHFL), which disbursed Rs 310 crore in home loans during the last fiscal year, has now decided to disburse home loans of Rs 1,440 crore during the fiscal year 2004-05.

BHFL expects to close the current fiscal year with Rs 440 crore of disbursement, a 40 per cent rise in its business on a year-on-year basis.

The company, in which German major BHW Inc is a stakeholder, has also decided to expand its operations in 20 more cities, taking its reach to 56 cities in the country.

The company has also decided to increase its manpower to 2,400 from the existing 1,000 by the end of the fiscal year 2004-05.

"With the impressive rise in the home loan segment witnessed by BHFL, we have now decided to take our products to smaller cities while strengthening our presence in major cities such as Mumbai, Delhi and Kolkata during the next one year. We will have 600 independent financial advisors across the country, thus taking the total manpower base to 2,400 by the end of the next fiscal year," Rajiv Gandhi, senior marketing manager of BHFL said on Friday.

Birla Home will add three new branches in Mumbai during the first quarter of the next fiscal year, while it will also extend its reach in various cities of Gujarat, including Surat and Vadodara.

The company has recently opened its office in Rajkot. BHFL will also open its offices in Raipur, Dehradun, Vizag and Indore during the next three months.

However, Gandhi denied any possibility of BHFL taking the route of direct sales associates (DSAs) like most other companies in this segment do.

Besides its target of disbursement of Rs 1,440 crore during the next 15 months, BHFLhas received 48,000 agreements from loan-seekers under Easy Home Loan scheme. It is now targeting 2.20 lakh agreements by the end of March, 2005.

"This scheme which has the liberty of even opening an account with us with as low as Rs 300 and securing a loan from BHFL under lower interest rate after a span of three to five years for the depositors, has witnessed tremendous growth since its launch.

"Till November, 30, 2003, we have signed 48,000 such agreements with our customers and we expect to get 75,000 customers under this scheme by the end of this fiscal year," said Gandhi.

Under the Easy Home Loan scheme, an account-holder will need to deposit a minimum of Rs 300 per month with BHFL for at least three years. The total amount will be provided by the company as home loan to the account holder at an interest rate of 7 per cent.

The deposits will also attract interest of five percent flat per annum and this scheme is mainly targeting the unorganised working force in the country.

"Till November, this year, four cities "" Lucknow, Bhopal, Pune and Kolkata "" have ranked among the top five cities giving us the best business since introduction of the scheme and with addition of new cities, we hope to do far better during the next two years," he said.

BHFL has also planned to launch two new variants of its Easy Home Loan product.