Centrum gets nod to start home finance business

The Centrum group has received a licence to start a housing finance company (HFC) from regulator National Housing Bank. The share price of Centrum Capital increased 4.97 per cent on the bourses in early trades and is trading at Rs 27.95 on intraday basis.

As per the company management, it is a significant move for the group as they are traditionally into fee-based business. The company is diversifying service offerings in secured lending with a focus on housing finance and SME lending. 

Centrum is looking to tap into small cities and towns, as there is substantial demand for end-user housing in the relatively under serviced and untapped Tier-II and Tier-III cities. The company will primarily target small entrepreneurs and salaried employees with small private companies.

Centrum is looking to build its HFC operations in Indore, Vadodara, Nagpur, Jaipur and Kolhapur initially, before expanding pan-India by 2018. The average loan size will be Rs 10-­15 lakh.

Centrum Housing Finance will work on a hub and spoke model, wherein the company will serve borrowers in a radius of 150 kms from the hub. The company will finance HFC by raising additional funds from the public as well as private investors in the upcoming couple of years.