Temasek’'s India NBFC to provide home financing

According to Livemint, Fullerton has already applied to the National Housing Bank for a license to set up a subsidiary with an initial investment of INR1 billion ($15.7 million). It will target average ticket sizes of INR2.5-4 million for borrowers in urban areas, while in rural areas it will invest between INR500,000 to INR1 million a time.

"So far, we have kept away from housing finance because competition was tough and we could not compete with the banks on pricing," said Shantanu Mitra, managing director and chief executive. "But now, with the network we have built, we think we can compete on pricing and also take advantage of the high returns this sector offers."

In addition to offering home loans, Fullerton India will also focus on lending to small enterprises in the rural areas. Mitra estimates there are around 60 million units in India employing about 100 million people, and contributing 8% of the GDP, but the credit needs of this segment are only 10% fulfilled.

Set up in 2007, FICC is headquartered in Mumbai, has 400 branches nationwide, and around $1 billion in assets under management. The NBFC has a strong focus on rural and urban micro-lending as well as catering to mid-size small and medium-sized enterprises. In October, the International Finance Corporation (IFC) said it would invest INR4.5 billion ($75 million) in the company via a subscription to secured non-convertible debentures (NCDs).

FICC is not the only credit business Temasek has backed in India. In April it completed its acquisition of SVB India Finance from US-based Silicon Valley Bank for INR3 billion, renaming the company InnoVen Capital India. The deal represented Temasek's entry into India's venture debt market and the first step in building a pan-Asian venture lending platform.

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• Topics
• South Asia
• Financials
• Financing
• Expansion
• India
• Financial Services
• Temasek Holdings
• NBFCs