‘The Indian real estate sector is slow but it is not sluggish’

Sukanya Kumar,
Founder & Director,
RetailLending.com

Headquartered in Bengaluru, RetailLending.com is a product of Virtual Group, a leading advisor and broking company in the real estate industry with more than a decade of experience. The online platform aims to help customers secure the best home loan deals through a comparative analysis without bias and with maximum clarity. Sukanya Kumar, Founder & Director, RetailLending.com, talks about her outlook on the Indian real estate sector and the business model of her company in an interview with Lalitha Rao.

What is your outlook on the Indian real estate sector after the general elections and for fiscal 2014-15?
The real estate market in India is extremely volatile in nature. Since it does not follow a fixed pattern it becomes difficult to make a definitive prediction. Some key concerns that mired the sector last year like subdued sales and piles of unsold inventory are expected to continue this year too. Also, with the elections underway there is a great degree of political uncertainty; liquidity issues, high interest rates and cautious sentiments are expected to underpin the real estate sector in 2014. On the positive side, though, the industry is slow but it is not sluggish.

What role will RetailLending.com play in real estate sector in coming years?
RetailLending.com is a key influencer for builders and consumers alike. RetailLending.com could be the effective intermediary between the developer, consumer and the banks. A majority of investment in the real estate industry comes from home loans; this specifically holds true for the under-construction properties. RetailLending.com aims to partner with developers in future to ensure that the buyers get the right deal and understand their home loan products. The advantage of this approach is two-pronged: the consumers avail the benefits apart from the transparency and quick decision making and, on the other hand, faster home loan processing from the banks; thus, ensuring that the builder gets the initial finance for inventory and the property can be constructed and delivered to the buyers on time. The real estate sector is increasingly recognising various initiatives to be more organised as the consumers are becoming conscious and aware of taking informed decisions.

Can you briefly explain your business model in India?
RetailLending.com is a one-stop finance solution provider built on the solid foundation of relationships and trust. Headquartered in Bengaluru, the company aims to enable its customers secure the best home loan deals through comparative analysis without bias and with maximum clarity.

RetailLending.com provides reliable single-window home loan solutions and offers its customers with solution, advisory service, choices and transparency to assist them in comparing and customising their finance to meet both immediate and long-term financial and lifestyle objectives. Their home loan services strengthened with non-exclusive tie-ups with leading banks and financial institutions across India including HDFC, HDFC Bank, ICICI, HSBC, Citibank, Kotak Mahindra, ING-Vysya, Deutsche, Standard Chartered Bank, Indiabulls, Axis, State Bank of India, Bajaj Finserv, LIC Housing and Edelweiss Home Finance.

The organisation’s in-depth understanding of the financial industry, extensive experience, and robust network of partners facilitates them to provide their customers with immediate comparison between various banks and home loan products, clarity on charges and fee structures, special negotiated rates, eradication of any hidden charges from banks and financial institutions, and end-to-end solutions from loan acquisition to disbursement at no cost to the home loan seeker.

What is the potential for advisory companies like yours in real estate sector?
The real estate segment is marred by issues like lack of clarity and transparency. There is a great level of ignorance on aspects such as home loans on the part of the customers which is hampering the growth and the smooth functioning of the industry. The need of the hour is to have an independent body that understands the developer’s and the buyer’s perspective and provides a solution in the benefit of both. This will not only bring about a level of transparency in the segment but also hasten the processes. Moreover, with their experience in the real estate sector companies like RetailLending.com can ensure that all requisite documents and checks on the developer are done so that there is no discrepancy in future.

Apart from real estate funds, do you also intend to foray into other areas like healthcare, logistics, infrastructure, and hospitality?
My expertise primarily lies in real estate and home loans; currently, I intend to improvise my services in this segment. As far as other verticals are concerned, our platform will facilitate those customers in terms of processes but the advisory would be restricted only to home loans. I generally put it as that, I am a baker who specialises in fine quality pastries but since I have a bakery I sell cookies too.

What are some of biggest challenges in this sector for advisory firms?
With the interest rates of each bank becoming competitive, it has become increasingly important for borrowers to take decisions keeping a number of other factors in mind like the legal and technical valuation, administrative charges, loan tenure, type of product, complexity of process, eligibility criteria, timely disbursement, pre-closure issues, and tax certificates, just to name a few. Also, home loans are one of the most expensive loans taken by consumers, hence it is integral for borrowers to understand the minor aspects too. This is where the challenge actually lies; consumers fail to understand the depth of the matter. Preconceived notions, and past experiences of relatives and friends become a benchmark for them to decide the product. It is a challenge for us to explain to them the relevance and importance of advisory in the current scenario. This was a major hurdle that we faced when we launched RetailLending.com a few years back. Also, a number of times once the property is finalised, the developer or the seller pressurises the borrower to hasten the process; this leads to improper decisions which have long-term repercussions. It is a challenge for us to make customers (borrowers) understand that they are getting into deep sea and one requires an expert to take seemingly simple decisions.

What needs to be done to foster better relations between developers and financers?
At RetailLending.com we understand that developers require the initial investment to come in from the purchasers almost immediately so that they can invest in the inventory integral for the project. On the other hand, banks look for a channel-partner who can filter the borrower-quality as per their policy-requirement and trained professionals who have the ability to screen quality business. This makes the entire loan process hassle free for banks and since the consumer has taken a well-informed decision, he is unlikely to regret the decision taken in a haste and change banks in quick succession. In a nutshell, RetailLending.com bridges the knowledge gap amongst borrowers, banks and developers, thus making it a win-win situation for all the parties involved.

How do you see the price scenario over the next few quarters in retail home loans vertical?
The interest rates currently are at their peak and it is unlikely for it to increase further. Moreover, RBI is taking effective steps to reduce inflation and increase the liquidity in the market. This would surely bring the much required stability in the market. What is yet to be seen is the monetary policy of the government elected through the forthcoming general elections. This will bring more clarity to the price scenario in the home loans vertical for the next few quarters.