While credit markets slump in much of the West, India is experiencing its very own mortgage boom.
Wizard Home Loans, a subsidiary of General Electric’s retail finance arm GE Money plans to invest $200 million in India by 2011.
“After 3-4 years, we expect 20-30 percent loan growth. We want to among the top five players in 5-10 years,” chairman Mark Bouris told a news conference.
The lender has plans to open 250 branches in the next four years, pricing loans at an aggressive 9.99%, which is 50-175 bps lower than most of the competition, thanks to a relatively lower cost of funds.
“Interest rates in India have recently become high. We feel we can challenge that,” Bouris said.
India’s mortgage market has grown more than 25% annually since 2000, but still has a ton of room to expand because of changing demographics.
According to National Housing Bank, India faces a shortage of 30 million housing units.
Wizard Home Loans expects a loan book of $2 billion by 2011.
In 2004, GE Money acquired Australian Financial Investments Group (AFIG), whose assets included Wizard Home Loans.
Yesterday, GE said it expected to report a $950 million dollar loss for the first nine months of 2007 on its subprime unit WMC Mortgage, which it plans to sell by year-end.