Bajaj Finance has shown rapid growth in the consumer loans segment. And one of the prime reasons for this fastest-growing mortgage business is that it acquires customers at a low cost. The Pune-headquartered company uses the formula it used in the consumer finance business, i.e. focus on low prices, risk management, and growth to grab the home loan market.
Why is Bajaj Finance successful in Home Loans?
The company has a long-term vision of including the bottom 40% of the population in financial services. Bajaj Finance has a plan to serve not only the prime customers but also the non-prime ones for growth. Its cutting-edge technology helps it to build a solid risk management system. With the help of this, the company tries to understand the customers, and then, based on those findings, it disburses loans within a few minutes. The idea of acquiring customers at low costs and granting financial services to the bottom line of the population is the crucial reason for the company’s success in the home loans business, as most NBFC companies do not target the bottom line of the people for financial services. Hence, competition is less here.
The NBFC offers home loans at a competitive rate of 7.70%, where borrowers can choose to go for an interest rate linked to the repo rate. Bajaj Finance finds it attractive and uses this chance to maintain its consistent growth rate of 20-25%. On the other hand, HDFC, the largest housing loan company in India, charges 8.15% with an 80% market share. In this scenario, the company believes that achieving medium-term growth in consistency is better than attaining faster development for a shorter period.
Through digital transformation, Bajaj Finance continues to drive strong growth by staying closer to its customers. As per Bajaj Housing Finance industry analysis, the company may record a sector growth between 9% and 10% for the current fiscal and compounded annual growth rate of 15% for the next five years.