Magma Fincorp plans housing finance subsidiary

KOLKATA: Asset finance company Magma Fincorp plans to enter into the housing finance market which is growing at 17-18% rate. It is also going to start gold loan business this fiscal.

Magma vice chairman and managing director Sanjay Chamria said it plans a separate subsidiary for housing finance business and will focus on affordable housing segment in tier 4 to 6 towns.

""We will apply for the licence shortly,"" Chamria said. ""It will be a 100% subsidiary to start with,"" he said.

The proposed company will be registered with National Housing Bank. T he country's Rs 5 lakh crore mortgage finance market is growing at 17-18% rate with Rs 1.5 lakh crore of incremental annual business.

The Kolkata-based non banking finance company will launch its gold loan business as Chamria feels its a secured business with good growth potential. ""Outlook for gold loan business is very positive,"" he said.

The lender with a Rs 12,000 crore outstanding loans is now active in financing cars, new and old commercial vehicles, construction equipment, tractor and SME businesses. In 2011-12, it has disbursed Rs 7,400 crore, registering a 37% growth over Rs 5,400 crore disbursement in the preceding fiscal.