Gee Wizard: Floater home loan at 9.99%
If skyscraping interest rates have grounded your dreams of owning a home, take heart. You now have the option to borrow at just 9.99% rate of interest.
By TNN |
NEW DELHI: If skyscraping interest rates have grounded your dreams of owning a home, take heart. You now have the option to borrow at just 9.99% rate of interest.
Consumer finance services provider GE Money and international mortgage player Wizard on Thursday announced a joint venture — Wizard Home Loans — that promises to offer loans at a floating interest rate of 9.99%. The company will invest $200 million in equity by 2011 and set up over 250 branches across the country by then.
“GE has 75% stake in the JV and will accordingly invest in the venture,” Wizard India CEO Egisto Franceschi said on Thursday. The remaining 25% will be held by the founders of Wizard Home Loans. As much as $1 million has already been infused. By the close of this fiscal year, over $10 million would be invested, he added.
GE Money has been scaling up its presence in emerging markets such as India, as General Electric hopes to enter banking in the country in 2009 when the government is expected to further open up the banking sector. The company has 15 branches. Wizard India is currently operating under licence from GE Money, pending approval from National Housing Bank and RBI.
“By 2011, we expect our loan-book size to be at least $2 billion. We see India as a steady growth market and want to be among the top five lenders in this country in the next 5-10 years,” Wizard Home Loans chairman Mark Bouris said.
“Interest rates in India have recently gone high. We feel we can challenge that,” he added.
Wizard India expects to grow at 100% in the first three years, after which growth will taper to 30-50%. The JV will create 3,000 jobs through branches.
While the renewable agreement between the promoters is for 10 years, the intention is to forge a long-term partnership that can go beyond 30 years, Mr Bouris said.
The domestic home loans segment has been growing at a compounded annual growth rate of 30% since 2001. According to National Housing Bank, India faces a shortage of 30 million housing units.
Speaking of an innovative operational model that reduces the cost of funds, Mr Bouris said consumers would be offered home loans through franchisees, who would be paid an upfront fee and a monthly commission as long as the loan remains on the company’s books. This would ensure the loan is serviced properly during its tenure.
The company plans to be transparent in its dealings with customers at the time the loan is sold and till the loan is serviced. “There will be hand-holding for customers. We are selling transparency as a motto,” he added.
Mr Franceschi said the cost of funds would be relatively lower as the company would get funds via its GE relationship. In addition, Wizard will provide loans against property to enable consumers meet needs such as business expansion or other financial needs, he added.
Consumer finance services provider GE Money and international mortgage player Wizard on Thursday announced a joint venture — Wizard Home Loans — that promises to offer loans at a floating interest rate of 9.99%. The company will invest $200 million in equity by 2011 and set up over 250 branches across the country by then.
“GE has 75% stake in the JV and will accordingly invest in the venture,” Wizard India CEO Egisto Franceschi said on Thursday. The remaining 25% will be held by the founders of Wizard Home Loans. As much as $1 million has already been infused. By the close of this fiscal year, over $10 million would be invested, he added.
GE Money has been scaling up its presence in emerging markets such as India, as General Electric hopes to enter banking in the country in 2009 when the government is expected to further open up the banking sector. The company has 15 branches. Wizard India is currently operating under licence from GE Money, pending approval from National Housing Bank and RBI.
“By 2011, we expect our loan-book size to be at least $2 billion. We see India as a steady growth market and want to be among the top five lenders in this country in the next 5-10 years,” Wizard Home Loans chairman Mark Bouris said.
“Interest rates in India have recently gone high. We feel we can challenge that,” he added.
Wizard India expects to grow at 100% in the first three years, after which growth will taper to 30-50%. The JV will create 3,000 jobs through branches.
While the renewable agreement between the promoters is for 10 years, the intention is to forge a long-term partnership that can go beyond 30 years, Mr Bouris said.
The domestic home loans segment has been growing at a compounded annual growth rate of 30% since 2001. According to National Housing Bank, India faces a shortage of 30 million housing units.
Speaking of an innovative operational model that reduces the cost of funds, Mr Bouris said consumers would be offered home loans through franchisees, who would be paid an upfront fee and a monthly commission as long as the loan remains on the company’s books. This would ensure the loan is serviced properly during its tenure.
The company plans to be transparent in its dealings with customers at the time the loan is sold and till the loan is serviced. “There will be hand-holding for customers. We are selling transparency as a motto,” he added.
Mr Franceschi said the cost of funds would be relatively lower as the company would get funds via its GE relationship. In addition, Wizard will provide loans against property to enable consumers meet needs such as business expansion or other financial needs, he added.
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