SUMMER INTERNSHIP PROJECT

REPORT ON
HOME LOAN PROCEDURE
THROUGH NBFC FOR LOWER-
MIDDLE INCOME SEGMENT
AT
HOMEFIRST FINANCE COMPANY INDIA LIMITED

Submitted to:
Dr. Ambedkar Institute of Management Studies &
Research, Deeksha Bhoomi, Nagpur

Submitted by:
PRASAD MANEKAR

Company Guide:
Mr. Adhish Telang

Faculty Guide:
Dr. Dhanashree Katekhaye

2021-2023

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 CERTIFICATE

This is to certify that the investigation described in this report titled “Home loan procedure
through NBFC for lower-middle income segment” has been carried out by Prasad Manekar
during the summer internship project. The study was done in the ororganization Homefirst
Finance Company India Limited, in partial fulfillment of the requirement for the degree of
Master of Business Administration of R. T. M. Nagpur University, Nagpur.
This work is the own work of the candidate, complete in all respects, and is of a sufficiently high
standard to warrant its submission to the said degree. The assistance and resources used for this
work are duly acknowledged.

Dr. Sudhir S. Fulzele

(Director)

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3
 ACKNOWLEDGEMENT

This is a matter of pleasure for me to acknowledge my deep sense of gratitude to R. T. M.

Nagpur University, Nagpur, and Dr. Ambedkar Institute of Management Studies &
Research,Deeksha Bhoomi, Nagpur for giving me an opportunity to explore my abilities via this
internship program. I would like to express my sincere gratitude to my internship supervisor Mr.
Adhish Telang, for his valuable guidance and encouragement in completing this project.
I am also thankful to all the faculty members of Dr. Ambedkar Institute of Management Studies
& Research and particularly my mentor Dr. Dhanashree Katekhaye for helping me during the
project.
I would like to record my sincere appreciation towards all the officials and employees of
Homefirst Finance Co. India Ltd., without whose kind assistance, my internship program would
not have succeeded. The facts and other vital information provided by them have contributed
towards making this project as comprehensive as possible. I am indeed thankful to them.
Finally, I am grateful to my family, friends and well- wishers for their unending support and best
wishes throughout the internship duration and the preparation of this report.

(Signature)

Prasad Manekar

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 INDEX

Sr. No Content Page no.

PART 1-
1.
A) COMPANY PROFILE-
Brief history.
Management structure.
Achievements, awards, and latest developments.
Products & Services offered.
Performance & Market share.
SWOT analysis.

B) SECTOR OVERVIEW-
2 Sector size and major players.
Regulations and regulatory bodies.
Sector’s contribution to economy.
Problems faced by the sector in general and the Company in
particular.

PART 2-
3.
A) ACTUAL WORK DONE
Week wise details of the work done including the details of
any specific tasks or projects assigned by the company.
Key learning week wise.
4. B) FINDINGS AND SUGGESTIONS

5. C) CONCLUSION

6. D) BIBLIOGRAPHY

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 PART-1

A) COMPANY PROFILE

BRIEF HISTORY

Founder: Jaitirtha Rao

P.S.Jayakumar
Manoj Viswanathan

Established- 2010
Office- Lokmat Bhavan, Lokmat sq., Ramdaspeth, Nagpur, Maharashtra

Homefirst Finance Company India Ltd.(HFFC) is a housing finance company which drives
affordable loans. HFFC mainly targets the first-time buyers of low and mid income population.
This company is registered with National Housing Bank (NHB) and is a Non Banking Financial
Company (NBFC). The company helps those who wish to buy their new home or renovate the
existing home. Usually other Nationalize Banks do not consider the cases where there is
insufficient loan documents but this company comes to the rescue of such people. HFFC is
known for it’s less-paper loan approval process. It guarantees the sanction of the loan within
48hours.
The company was incorporated in February 2010 by Mr.Jaitirtha Rao who was former founder,
chairman, MD of Mphasis; P.S.Jayakumar who started his career with Citibank in 1986 and held
senior management position there; Manoj Vishwanathan, he has played an important role in
building the branch-based consumer-lending model for Citigroup in India.
HFFC offers wide range of home loan services to its customer and hence has succeeded in
customer satisfaction over the years. The hierarchy of the organization is designed in a way so
that a general customer has an access to meet the upper authorities also. Over its journey it has
shifted to paperless loan procedure with even the loan documents are scanned and uploaded on
their systems
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They are keen to provide the online service to the customer through their Mobile App called
‘Home First Customer Portal’. The user gets a regular intimation from a bank regarding the
loan status and EMI payments.

MANAGEMENT STRUCTURE
Homefirst Finance Company is founded by three members and has eight members on panel
of Board. Jaitirtha Rao has a Master’s degree in Business Administration from the IIM-
Ahmedabad as well as University of Chicago, US. He served NASSCOM as a chairman. He
is on the Board of Trustees of the India Foundation of the Arts and of Sujaya Foundation.
P.S. Jayakumar holds Master’s degree in management from XLRI, Jamshedpur, master’s
degree in Commerce from University of Madras and is an Associate Member of ICAI. He is
also a Gurukul Chevening Scholar of Economics & Political Science.
Manoj Viswanathan is an engineer in Electrical and Electronics field from BITS, Pilani and
MBA from XLRI Jamshedpur.
The hierarchy of NAGPUR region is as follows:
Zonal Regional Manager
Mr. Abhijeet
Jamkhendikar

Regional Manager
Mr. Raj Goyal

Cluster Manager
Mr. Avinash Gondane

Branch Manager
Mr. Adhish Telang

Relationship Manager

Direct Selling Agent

(DSA)

Customer
Mr. X
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 Founders

Board Of Directors

Business Operations Finance Human Marketing Customer

Development Department Department Resource Department Care
Manager Department Department

Research Team

Regional Area Head

General Customer Service
Manager Manager

Branch Customer
Manager Service
Manager

Relationship Sales
Manager Execution
Officer

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 ACHIEVEMENTS, AWARDS AND DEVELOPMENTS

Jaitirtha Rao

 Jaititrtha (Jerry) Rao has been honoured with Distinguished Alumnus Award from
University og Chicago.
 At the time of being a founder, chairman, MD of Mphasis, he was awarded the Ernst &
Young Entrepreneur of the Year Award twice in 2001 & 2004.
 Honoured with Karnataka State Rajyothsava Award in 2005.
 While serving Citicorp for 20 yrs he was primarily responsible for building one of the
bank’s Asian retail and credit card franchise, apart from working in various parts of the
world.
 He has been an entrepreneur-in-residence at Harvard Business school and lecturer at
IIT,Bombay.

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 P.S.Jayakumar

 Mr. Jayakumar was a country head for Consumer Business in India and Head for
Consumer Lending Business in Asia Pacific.
 During his banking career, Mr. Jayakumar has contributed significantly to the
development of the retail banking industry in India.

HFFC

 2011- Series A funding from Bessemer Venture

 2012- Started operations in Gujarat and Tamil Nadu
 2013- Approved 1000 loans and their loan book crossed Rs.689.5 mn.
 2014- Company became profitable with Gross Loan Assets of Rs.1629.1 mn.
 2015- Customer base of 5000
 2016- Presence in 25+ cities and tie-ups with customer base over 10,000
 2017- Series C funding: TrueNorth invests in Home First; Credit rating (ICRA) becomes
A+; Gross loan assets became Rs. 8473.16 mn.
 2018 - Net worth crosses Rs.4885.77 mn.
 2019- Gross Loan Assets crosses Rs.24,435.74 mn; customer base crossed 29,000; 60
branches
 2020- AUM crosses Rs. 35bn; Warburg Pincus invests in the company

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 PRODUCTS AND SERVICES

HFFC has wide range of products of home loan to offer the customers of nearly all the
segments. Lower and middle income groups are the targets of the company. But as the
company tagline “We’ll take you home” says, the company serves every customer equally.

1. Home loans for Salaried Professionals:

In the cluster of many customers there involves some salaried people also who wants apply
for the loan but are not able to get the same from a nationalize bank due to some documents
issue or delay in sanctioning process. HFFC guarantees the sanction of the case within 48hrs
of its registration.
The company offers the interest rates to such class in the bracket of 11.90% - 14%.

2. Home loans for the Self Employed:

Some businessmen are also the part of organization although the company does not provide
business loan but these people are ready to take home loan from HFFC for seamless process
of application. Interest rates offered lies between 12.90% - 15%.

3. Home Construction Loans:

Loans are given in self construction and builder constructions cases. The customer has his
own land or buys the land and wants to build a home.

4. Home Extension & Renovation Loan:

HFFC provides home loan for repair, renovation, extension of house. The company finances
80-85% of total repair costs.

5. Loan Against Property:

When the customer to avail the loan for some other purpose by mortgaging his/her own
property, the company scrutinizes the property and the documents thoroughly and proceeds
the case further. The rate of interest offered in such cases is between 17-18%.

6. Home Loans for NRIs:

The company makes no difference in residents and NRIs. They boost a quick and easy
process which is carried out entirely online. The rate of interest for NRI cases lies in 13.50%
- 15%.

7. Home Loans for Senior Citizens:

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Senior citizen loans are also given on fulfilling the terms and conditions of Insurance Team.

8. Home Loan Balance Transfer:

Some customers want to transfer their loans to some other banks due to several reasons like
high interest rates etc. In these cases the company closes the loan case and gives approval to
the other bank to carry forward the same and the original papers are handed over to the next
bank.

9. Home Loan Top Up:

When a customer is in need of further extra amount, he opts for Top Up loan. Some
conditions are there to be fulfilled by the applicant to avail the loan in this category.

10. Shop Loans:

There are some residential buildings or complexes that offer the small business owners a
place to establish a shop and continue their business. These sorts of establishments are
financed by the company HFFC. 17-18% rate of interest is offered to them.

11. Loans for purchase of Commercial Property:

HFFC allows its customer to apply for the loan for commercial properties also.

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 Performance & Market Share

Net Sales Turnover

700
595.67
600

500 477.12

398.66
400
in Crores

300 259.98

200

100

0
2019 2020 2021 2022
Years

Net Sales Turnover

MARKET SHARE

Market Capitalization (in Crores)

Avas Financiers
Punjab LIC VALUE
Housing
Housing
Home First
APTUS
Indiabulls
3%
FinanceFinance
1%
3%
1%1% 4%

HDFC
85%

Avas Financiers Punjab Housing Finance Home First HDFC

Indiabulls APTUS VALUE LIC Housing Finance

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 SWOT Analysis
Strengths:

 Young workforce
 Large network of DSAs
 Sufficient number of Relationship Managers appointed
 Hustle free and early sanction within 48hrs
 Fast loan Procedures
 Paper less work
Fast disbursal
Single person point of contact
Less npa

Weakness:

 High interest rates

 Delay in processing ACH
 Customer service managers are comparatively less in numbers
 Heavy workload

Opportunities:

 The company should provide prompt customer service when it comes to providing
documents demanded
 Mobile App should be more user friendly
 Giving accurate information to the customer at the time of registration only
 The company should appoint a person who can go for site verification

Threats:

 Rate of interest offered by other housing finance companies

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 B) SECTOR OVERVIEW

SECTOR SIZE

 In India, housing finance is provided by private and public sector banks as well as
foreign banks. However the market is dominated by HOUSING FINANCE
COMPANIES.
 The hosing finance market is expected to expand at a compound annual growth rate
(CAGR) of 20.58% during the FY2022- FY2027 period.
 Affordable market rates and increasing urbanization are the two main reasons for the
growth of the sector.
 In 2021, the affordable housing segment made upto 90% of the market in terms of
volumes and of 60% based on value.
 Moreover ICRA Ratings revised the growth estimate for HFCs to 10-12% from 9-11%.
 The reason behind this revision was the expectation of a continued improvement in
disbursements.
 The on-book portfolio of the NBFC-HFC sector grew to Rs.12.2lakh crores as of March
31, 2022 registering 11% YoY growth.

MAJOR PLAYERS

A] HDFC (Housing Development Finance Corporation)

 HDFC is a private development finance institution based in Mumbai.

 It was established in 1977 as first specialize mortgage company in India.
 Hasmukhbhai Parekh is the founder of HDFC.
 Products and services offered by the bank are- Mortgage; Life Insurance; General
Insurance; Mutual Fund
 Foreign Institutional Investors has major shareholdings in it.
 HDFC bank annual revenue for 2022 was $21.138 B, a 1.12% increased from 2021

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B] LIC Housing Finance

 LIC Housing Finance is a subsidiary company of LIC.

It is one of the largest housing finance mortgage loan
companies.
 LIC HFL was founded on 19 June 1989 by LIC. It has
its headquarter in Mumbai
 Net Sales turnover of LIC HFL stood at Rs. 19919.07 Cr. on March 2022

C] AAVAS Financiers Ltd.

 Aavas was incorporated in February 2011 with ‘AU

housing finance private limited’.
 It started its operation on March 2012 and later named as
‘ AAVAS Financiers Limited’.
 Sushil Agarwal is the founder of the company
 Its Net Sales Turnover on March 2022 was Rs. 1304.36 Cr.

D] APTUS VALUE HOUSING FINANCE INDIA LTD.

 Mr. Anandan is the founder, chairman and MD of Aptus.

 It was stablished in the year 2009
 In such a short span it achieved a turnover of Rs. 678.97
Cr. as of March 2022

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 REGULATORY BODY

 National Housing Bank is an apex institution for Housing Finance Companies. It

was set up by the Act of Parliament in 1987. the main function of NHB is
supervision and grievance redressal regarding housing finance companies;
financing; promotion and development.

 It supervises HFCs through on-site inspections based on CAMELS approach where

capital adequacy, asset quality, management aspects, earnings, liquidity and
systems and control are examined keeping in view the requirements of the National
Banking Act, 1987 and Regulations prescribed by RBI.
 For offsite monitoring and surveillance, Bank is dependent on the periodic returns
and other information submitted by the HFCs to the Department of Supervision.

 RBI has a separate department called ‘Department of Non-Banking

Supervision(DNBS) which is entrusted with a responsibility of regulation and
supervision of NBFCs under the regulatory provisions contained under Chapter III
B and C and Chapter V of the RBI Act,1934.
 The RBI has a regulatory framework which includes registration of NBFC; issuing
regulations of various categories of NBFCs; issue of directions on acceptance of
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 deposits by NBFCs and surveillance of the sector through off-site and on-site
supervision.
 RBI has the power to even cancel the certificate of registration, issue of prohibitory
orders from accepting deposits, filing criminal cases or winding up petitions under
provisions of Companies Act in extreme cases.

REGULATIONS

There are some regulations imposed by the RBI on NBFCs:

 NBFC has no restrictions on accepting public deposits or renew the same but it
should be for a minimum period 12months and a maximum period of 60months.
 It has complete restriction on accepting deposits which repayable on demand.
 RBI has a prescribed rate of interest, above which no NBFC is allowed to offer
ROI.
 No additional perks or gifts can be offered to the depositors.
 A minimum investment grade credit rating is necessary to be maintained
 Repayment of deposits in NBFCs is not guaranteed by RBI.

SECTOR’S CONTRIBUTION TO ECONOMY

 Housing contributes around 50% of personal/retail loans.

 India’s home loan market is currently valued at about Rs.24 lakh crores.

 It is expected to double in the next 5yrs.

 Mortgage to GDP ratio rising from 11% according to SBI’s economic report ‘Ecowrap’

 The share of ‘Housing Loans’ in ‘Bank Credit’ has increased to 14.4% in June 2022
from 13.1% in March 2020.

PROBLEMS FACED BY THE SECTOR

 Government policies for housing finance sector:

Nowadays Government of India is introducing various housing schemes for different
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sections in society and they squeezed up by the primary levels and never achieved the
expected results. The reason behind this poor administrative control and lack of strong will-
power.
 Development of fundamental infrastructure for housing & technological innovations:
Housing needs some basic infrastructural facilities like water and electricity supply, proper
drainage system etc. to grow. Such facilities are dependent on Government interest and
efforts. The technical innovation also support the sector by cutting down cost of construction
up to a reasonable level. The Central and State Government are tried hard to fulfill these
requirements but due to unstable political environment most of the housing schemes are
limited to the paperwork or remain at its primary stage.
 Non availability of funds:
Housing finance is a long term capital investment which requires plenty of funds. The
funds organized through formal financial institutions are much lower than what it needs for
tackling the problem of housing finance in India.

PROBLEMS FACED BY THE COMPANY

 Less technological advancement among customers:

The company gives the facility of payment of EMI or pre-payment service through its
mobile app but the customer is not always well versed with it and hence they need to visit
the branch frequently.
 Delay in the internal process:
The process for EMI payment is called ACH process in which the company takes a sign of
customer and fills the details and upload the same on ‘TechProcess’ website. If the company
delays this process then EMI does not get deducted directly through the account and has to
pay the same through a standard link or in cash. This may lead to application of bouncing
charges.
 Over allotment of work to RMs:
RM has the duty to handle the customer, arranging their documents, customer’s primary
registration and site verification. This sometimes leads to deferred work. This responsibility
if handled appropriately, can reduce the risk of mistakes related to customers.

Actual Work Done

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  Introduction to the staff
 Interaction with Regional Manager and Cluster head
 Interaction with my Branch Manager Adhish Telang
Week 1  I was assigned as the Intern of Nagpur-West and my product was
Builder Purchase
 Learn about FSI & FOIR.
 Learn about Company history and Company structure
 Learn about Company products and Services
 Learn about All the Property papers like Sale deed,
Akhivpatrika(Property Card),Section Map, Agreement to sale, Noc
 Learn about EWS, LIG, MIG
Week 2
 Learn about Negative Profile
 Learn about PD Personal Discussion for lone.
 Training regarding actual work for what we have to do for next 2
month was given by the branch Manager
Training Includes:-
 On Field work
 First 15 days we had Clients and DSA (Direct Selling Agents) visits
with our experience Regional Manager to gain knowledge about
how products can be Pitched.
 Visited to Kanhan for collection of rent from a clint PD home
verification property visit.
 Visited Dream Pathology Lab.
 Visited SDPL Office
 Shop Verification & Home Verification of Dilip Nimje

 Did the Client visit with Regional Manager for Personal Details
regarding loan approval
 Visited Our Lawyers Office to discuss Property Papers Regarding
Week 3 Home Loans
 Visited Customer’s homes with the Regional Manager For Collection
of Pending EMI
 Actual work has been assigned by Branch Manager to bring the
Week 4 cases from DSA

It Includes:-
 We have to Visit DSA (Direct Selling Agent) Offices for Pitching
our Company Product
 We have to Visit Builders office for Pitching our Company Product

Field work Started: -

 Business development in Godhni
Visited: -Siddhi Vinayak Properties, Visited DSA DIPAK

 Business Development in Hudkeshwar

Week 5  Business Development in HB Town, Paedi
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 Business Development in Besa, Pipla Beltarodi
 Business Development in Shantinagar, Kamptee
 Business Development in Vrindavan city CA road
 KEY LEARNINGS

 While working in this organization my communications skills are Enhanced

 Learned the techniques of collections of EMI

 Early sanctioning of the cases

FINDINGS AND SUGGESTIONS

 RMs are required to visit site for verification and do the whole login process by
themselves this can cause overburden on the RMs.
 Glitches in EMI process as most customers are from lower economic segment they
are unable to read or write, this can bring a problem for payment of EMIs.
 They are sometimes find it difficult to pay the EMI online and it leads to bouncing of
EMI
 Unawareness of the customer regarding some serious points of the case

 The company should employ a person who can do the work of site verification so that
a RM is free to focus completely on the registration.
 The ACH forms need to be process at the time of signing only
 Awareness campaigns should be implemented to mitigate the mistakes from customer
point of view.
 The campaign should also educate the customers regarding digital payment process

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 CONCLUSION

 Home First Finance Company India Ltd. has a good reputation in Home Loan market.
 The success factor of HFFC is hard work, discipline, co-operative structure of its
employees and it helps the company to achieve customer satisfaction level.
 The company also maintains good relationship with its customers. It should focus
more on the operations department.
 It was a great experience working in HFFC. Not only did I got an opportunity to
overcome my fear of public speaking, I managed to perform as efficiently as I ever
could.
 The staff was humble and supportive towards colleagues and the customers as well.

BIBLIOGRAPHY

 https://homefirstindia.com/about-us/
 https://nhb.org.in/en/regulation/
 https://www.rbi.org.in/Scripts/NBFCCitiChart.aspx#:~:text=The%20Department
%20of%20Non%2DBanking,Bank%20of%20India%20Act%2C%201934.
 https://www.moneycontrol.com/stocks/marketinfo/marketcap/bse/finance-
housing.html
 https://www.marketresearch.com/Netscribes-India-Pvt-Ltd-v3676/Housing-
Finance-India-32058738/
 https://economictimes.indiatimes.com/home-first-finance-company-india-ltd/
yearly/companyid-55367.cms

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