Date:21/09/2007 URL: http://www.thehindu.com/2007/09/21/stories/2007092163102000.htm

Business

GE Money, Wizard form joint venture

Home loans will be offered at 9.99 per cent

NEW DELHI: Consumer financial services provider GE Money and international mortgage player Wizard on Thursday announced a joint venture, ‘Wizard Home Loans,’ that will offer 9.99 per cent floating interest rate on home loans.

“The joint venture will invest $200 million in equity in India and aims to set up over 250 branches across the country by 2011,” GE India CEO T. P. Chopra said here.

It would offer an aggressive interest rate of 9.99 per cent to consumers, he said.

The prevailing market rate for home loans is between 11 and 12 per cent for varying tenures. The domestic home loans segment has been growing at a compounded annual growth rate of 30 per cent since 2001. According to the National Housing Bank, India faces a shortage of 30 million housing units.

Wizard Chairman Mark Bouris said the company hoped to attain the $2-billion asset base of home loans by 2011. He said consumers would be offered home loans through franchisees, which would be paid an upfront fee and a monthly commission as long as the loan remains on the company books.

Wizard India CEO Egisto Franceschi said the cost of funds would be relatively lower as the company would get funds from its GE relationship.

The company planned to be among the top five players in the Indian home loan market in the next 5-10 years, he said. In addition, Wizard will provide loans against property to enable consumers to meet their needs such as business expansion and any other financial requirements, he added. — PTI