GE Money unit Wizard Home Loans to invest in India

GE Money unit Wizard Home Loans to invest in India

New Delhi: Australia’s Wizard Home Loans will invest $200 million in India by 2011, and aims to be one of the top five mortgage companies in the country in 5-10 years, a senior company official said on Thursday.

Wizard, a subsidiary of General Electric Co’s retail finance arm GE Money, expects to double its India business annually over the next three years, chairman Mark Bouris told a news conference.

“After 3-4 years, we expect 20-30% loan growth. We want to among the top five players in 5-10 years," he said.

“We are expecting a loan book of $2 billion by 2011," Bouris said, adding the company would open 250 branches in four years.

Wizard, which will initially offer its products through GE Money’s Indian arm, has applied to the regulator for its own operating licence.

Wizard will price home loans at a competitive rate of 9.99%, at least 50-175 basis points lower than that offered by major Indian lenders like State Bank of India , ICICI Bank and HDFC.

India’s mortgage sector has been growing by more than 25% annually since 2000, and total home loans outstanding with banks and housing finance companies stood at Rs2.3 trillion up to May 2007, according to central bank data.

Monetary tightening since June 2006 has moderated home loan growth even as a housing shortage estimated at 30 million units has pushed up prices.

“Mortgage penetration in India is very low, there is huge under-supply of property and a massive change in demography," Bouris said, referring to demand for cheaper home loans.

“Even a 20% home loan growth is still very high for any asset class," he added.

In 2004, GE Money acquired Australian Financial Investments Group (AFIG), whose assets included Wizard Home Loans.