Our client, a leading housing finance company, wanted to gain insights into the financial strength and operational efficiency of a leading housing finance company (HFC) in India. The HFC was the first of its kind established in the late seventies and was operating with close to 200 branch offices all over India willing to understand the company with respect to the following factors:
- Customer and Product focus
- Processes with emphasis on credit and collections
- Cost structure and financials & Corporate Structure
- To develop an outlook for the future for the HFC between 2005 and 2008
The bank wished to demystify how the HFC seemed to have it all: the market share, profitability and a culturally strong work force, thus they approached UC Strategy.
To develop insights into the HFC, UC Strategy adopted the following approach:
- Reviewed the strategic drivers and built insights into the HFC:
- Conducted desk research by analysing the financial data publicly available for the HFC over past 3 years
- Interviewed around 50 respondents spread across 10 cities including employees of the HFC and its key partners which included valuers, builders, DSA’s etc.
- Studied the industry trends, HFC’s past and current performance and developed scenarios for its future growth
- The insights were developed
- The HFC enjoyed high spreads due to its ability to raise funds at lower rates compared to other HFC’s and many Banks
- It had one of the lowest cost income ratios as well as the lowest NPA levels in the industry due to the factors w.r.t.
- Unique sourcing strategies
- Branch office level people profile
- Technical appraisal methods
- Integrated systems
- Evolved screening and appraisal systems
- Efficient and customised recovery tactics