HDFC launches lifestyle loans

By Lalin FERNANDOPULLE

The HDFC Bank has stepped in to empower daily wage earners. the most vulnerable segment through its mobile banking network which promotes savings and ensures a brighter future for those who have no banking mode.

The Bank has over 100 palm-top operators who help small time traders to deposit their money daily which encourages them to save and bank. Tea pluckers, rubber tappers, cobblers, masons, carpenters, fishermen and natamies are some of the beneficiaries of the scheme.

HDFC Bank Chairperson, Siromi Wickramasinghe said that many daily wage income earners have bought vehicles and land and have developed their businesses. Their lifestyles have changed and their children have learn to save and bank.

A large segment of population are yet unbanked due to the low financial literacy rate and lack of access to banking. The micro finance sector of banks have filled this vacuum to a certain extent but still a lot has to be done to get the rural sector into the banking stream.

Wickramasinghe said that the HDFC Bank has been in the forefront of empowering the low income segment of society by providing loans to build homes and live a decent lifestyle.

The HDFC Bank which operates 32 branches, plans to expand operations in the East by opening a branch in Kalmunai shortly. The Bank opened a branch in Jaffna early this year.

Wickramasinghe said that the Bank captured over 20,000 people in the urban sector to formal banking system through the mobile banking service last year.

The Bank recorded a 130 percent increase in Profit After Tax and 28 percent growth in assets last year. The saving fund which was a strategic priority in 2011 achieved a remarkable growth of 48 percent YoY to reach Rs. 1.5b benchmark.

“The Bank will launch short-term lifestyle loan schemes for less than three years. The Ran Naya loan scheme enables lower and middle income customers to obtain loans against their gold collateral for housing requirements.

Kedella, Situ Sevana, Sirisara, Thilina, Shrama Udana, Guru Sevana, Prathilaba and Dhana Nidhana are some of the Bank's other products.

Assistant General Manager ,Finance and Planning,being D. Vidana Pathirana said that over 15,000 small-time traders were visited and around Rs. 10-12m is being collected daily. The Bank has over 80,000 daily wage account holders.

“The Bank's aim is to help small and medium scale entrepreneurs to develop their business and enhance their income . Many small time businessmen have obtained loans and built houses”, he said.

The HDFC bank has helped inculcate the habit of saving among daily wage earners who were now prepared for retirement. Many non-fixed income earners do not plan for retirement.

The Bank launched a Group Housing Fund last year enabling depositors to earn a higher rate of return. It is a retirement fund where depositors could withdraw money after the age of 55.

HDFC which has been in existence for 27 years is the only Bank that caters exclusively to the housing sector. The Bank empowered over 14.200 families last year with permanent housing finance solutions by granting the highest number of loans. The facilities financed 12,142 housing units and over 600,000 who needed decent housing.

The highest number of loans were granted in Colombo, Gampaha, Kalutara and Kandy districts which have the highest population density. The Bank granted 64 of loan facilities to low and middle income groups who hardly had access to housing finance.