Mahindra & Mahindra Financial Services Ltd on September 13 approved the expansion into mortgage business as it intends to leverage its strong geographical presence in the retail lending space and exploit the mortgage lending opportunity for its existing as well as new customers.
This would include providing housing finance, top-up loans, lease rental discounting, home improvement and home extension loans, balance transfer loans and construction finance among others, it says in a stock exchange filing. The company would also participate in affordable housing loan schemes of governments.
The non-bank lender is looking to invest ₹20-30 crore over next 12 months, including IT spends.
“This expansion would leverage the company’s established presence in the financial services sector and its deep understanding of the customer needs resulting in increase in the mortgage lending opportunity to its existing customers as well as new customers,” the filing says.
Mahindra Finance appointed Jaspreet Singh Chadha as chief business officer of mortgages from September 30, 2024.
Chadha brings over 22 years of experience across companies such as Citibank N.A., India, ICICI Bank Ltd, Aditya Birla Management Corporation Pvt Ltd, SML ISUZU Ltd (Swaraj Mazda) with his current stint being at Bajaj Finance Ltd.
Mahindra & Mahindra Financial Services in May received corporate agency licence from insurance regulator IRDAI, allowing the company to sell life and general insurance policies offered by various insurers. “The corporate agency licence would help in broadening Mahindra Finance’s product portfolio by incorporating insurance solutions. It would help customers with their financial and insurance needs being met by a single entity. The process would augment the company’s existing sources of revenue and profits as it deploys its common infrastructure of branch network and feet on street,” it said at the time.
The corporate agency licence enables Mahindra Finance to solicit, procure and carry on the business of selling, distribution, advertising, marketing of all kinds of insurance products and services including life insurance, health insurance, general insurance on behalf of various Insurance companies as a corporate agent.
Earlier this year, the non-banking financial company detected a fraud at one of its branches. The fraud involved the forgery of KYC documents, leading to the embezzlement of funds in respect of retail vehicle loans disbursed by the company. The company at the time said that the financial impact of this fraud is unlikely to exceed ₹150 crore.
Mahindra Group is focusing on achieving the full potential of Mahindra Finance which has underperformed its peers over the short term. “The potential lies to first catch up with peers and to do better than peers. For us, it was first important to acknowledge where we were in terms of reality. That’s one of the lessons we have learnt as well. Once you acknowledge reality, you know what to do with it and then have a clear path to address what we need to drive,” Mahindra Group CEO Dr Anish Shah told Fortune India last year.
