Speaking with ET, founder Rohit Chokhani said the funds will primarily be used to grow the loan book and expand its network in smaller towns.Mumbai-based Easy Home Finance has secured $30 million led by global asset management firm Investcorp. The round also saw participation from existing backers Ranjan Pai’s Claypond Capital and SMBC Asia Fund. This takes the total funding raised by the company to $80 million.
Speaking with ET, founder Rohit Chokhani said the funds will primarily be used to grow the loan book and expand its network in smaller towns.
“Currently, we are present in 14 states and 106 cities, and want to go deeper into smaller towns with a population of more than 500,000,” Chokhani said.
While the company has its own loan book, it also co-lends with DCB Bank and Bajaj Finance.
At present, Easy Home Finance gets 40 per cent of its business from tier-II / tier-III cities. Its current assets under management (AUM) stands at around ₹2,000 crore, clubbing both its co-lending and its own lending books. Chokhani is targeting a loan book of ₹3,500-3,800 crore within the next 18 months.
“If you look at the larger picture, home finance companies are well capitalised, and investors are keen to fund them as the housing sector in India is growing very fast,” he said.
While the sector has seen a boom, the assets of such fintech lenders are yet to see multiple payment cycles. These are long-tenure loans of around 20 years, and need to be serviced over two decades or so.
“The company has been profitable for three years now. My aim is to achieve an RoA (return on assets) of 3 per cent within the next six-eight quarters, and push for 4 per cent by 2028,” Chokhani said.
For an NBFC, the RoA shows the profitability of its AUM.
Founded in 2017 by Chokhani, Easy Home Finance operates an app-based lending platform which has automated applications, underwriting, and loan management. The company cannot compete with high street lenders financing large housing projects in big metros, so it focusses on the suburbs of large cities and smaller towns. It also lends for government-backed housing projects, and to middle-income families eligible for government housing schemes.
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