LIC Housing to focus on project financing

LIC Housing Finance plans to concentrate on project financing this year because the returns there are higher.

Consequently, LIC Housing expects a four-fold increase this year in its disbursements to project financing . The company has forecast that project financing disbursements will increase to Rs 1,850 crore in 2005-06 from Rs 443 crore the previous year.

Project disbursements are loans given to real estate builders for promoting residential projects. The interest rate asked of the builders for projects is slightly higher compared to the interest rate paid by retail customers for housing loans.

Addressing the media, S K Mitter, director and chief executive officer, said with interest rate hardening, the company expects to make profit from its project disbursements this fiscal. We plan to grow by 25 per cent during the current financial year, he said.

The company's total disbursements was Rs 4,650 crore in 2004-05 of which about Rs 4,207 crore came from housing loans to individuals.