LIC Housing Finance Business Model Canvas

LIC Housing Finance's partnerships with housing finance regulators, particularly the National Housing Bank (NHB), are vital. This relationship supports refinancing options and ensures regulatory compliance, essential for operational stability. Refinancing from NHB offers a consistent funding source, helping manage the asset-liability mismatch effectively. Adherence to NHB's regulations guarantees the company meets industry standards and maintains financial health.

• In FY24, NHB provided significant refinancing support, with the total outstanding refinance from NHB at ₹25,000 crore.
• Regulatory compliance is a continuous process, with regular audits and reporting to NHB.
• LIC HFL's capital adequacy ratio (CRAR) was maintained above the regulatory requirement of 15% in FY24.
• The company actively participates in NHB's initiatives to promote affordable housing.

LIC Housing Finance actively engages with credit rating agencies to secure and maintain favorable ratings, which are crucial for accessing funds. These ratings, such as those from CARE Ratings, impact the company's ability to issue debentures and commercial papers. Positive ratings signal financial stability, attracting investors and lowering borrowing costs. LIC Housing Finance's strong credit profile supports its funding strategies.

• CARE Ratings assigned LIC Housing Finance an AAA rating, as of December 2024.
• This rating reflects the company's strong financial position and creditworthiness.
• The AAA rating helps the company secure funds at competitive interest rates.
• Maintaining a good credit rating is vital for business continuity.

LIC Housing Finance's robust IT infrastructure is crucial for its operations. It facilitates online loan processing, customer relationship management (CRM), and data analytics, supporting efficient service delivery. Digital transformation initiatives are key, helping to boost efficiency, cut costs, and improve customer satisfaction. The company has been actively investing in technology upgrades to build a scalable and flexible technology environment.

• Rs 1,11,447.81 crore disbursed in loans for FY24.
• Digital loan disbursals increased by 32% in FY24.
• IT spending increased by 18% in FY24.

LIC Housing Finance relies on various funding sources for financial stability. Access to diverse channels like debentures and bank loans ensures a stable funding base. This approach reduces reliance on any single source, offering financial flexibility. Diversification is key for managing liquidity and interest rate risks effectively.

• Debentures contributed significantly to the funding mix, with ₹10,813.71 crore raised in FY24.
• Bank loans and other borrowings stood at ₹65,381.88 crore in FY24.
• The company also utilizes commercial paper to manage short-term funding needs.
• Customer deposits offer another avenue for funding, contributing to the overall financial strategy.

LIC Housing Finance assigns relationship managers to high-value customers, offering personalized attention and solutions. These managers understand client needs, providing proactive support for a better experience. This approach builds lasting relationships, encouraging repeat business. In 2024, this strategy helped increase customer retention by 15%, according to company reports.

• Personalized service enhances customer satisfaction.
• Proactive support builds trust and loyalty.
• Long-term relationships boost customer lifetime value.
• Repeat business drives revenue growth.

LIC Housing Finance utilizes feedback mechanisms and surveys to continuously improve customer relationships. Gathering insights through these methods allows for service enhancements and adaptation to customer needs. This customer-centric approach is crucial for sustained success. For example, in 2024, customer satisfaction scores improved by 7% after implementing changes based on feedback.

• Customer satisfaction surveys are conducted quarterly to gauge service quality.
• Feedback is analyzed to identify pain points and areas needing improvement.
• The company uses this data to personalize services and offerings.
• Regular follow-ups ensure that changes are effective and meet customer expectations.

LIC Housing Finance targets individuals in tier 2 and tier 3 cities seeking affordable housing. This segment typically has moderate incomes and requires budget-friendly financing. The company plans to significantly increase its affordable housing loan share. In 2024, the affordable housing segment showed strong growth.

• Focus on Tier 2/3 Cities: Targeting areas with high demand.
• Income-Based Lending: Providing loans aligned with moderate incomes.
• Increased Loan Share: Aiming to grow affordable housing loans.
• 2024 Growth: Segment saw substantial expansion.

Existing LIC policyholders represent a key customer segment for LIC Housing Finance, offering a built-in audience for home loans and property loans. This segment benefits significantly from the established relationship between LIC and LIC Housing Finance, leveraging the trust and credibility of the parent company. A significant portion of these customers are acquired through agent referrals, fostering a sense of community and loyalty. In 2024, LIC Housing Finance saw a 12% increase in loan disbursements to existing LIC policyholders.

• Agent referrals are a primary acquisition channel, contributing to 35% of new business.
• Policyholders often seek loans against property, accounting for 20% of the loan portfolio.
• The average loan size for this segment is ₹30 lakhs, reflecting their financial stability.
• Customer retention rate within this segment stands at 88%, indicating high satisfaction.

LIC Housing Finance generates revenue from project finance, primarily through interest and fees on loans to real estate developers. These project loans offer higher yields compared to standard home loans, but they also come with increased risk. In the past, the company actively engaged in builder financing, however, they have strategically reduced exposure to developer financing due to concerns about asset quality.

• Interest income from project loans contributes significantly to overall revenue.
• The risk profile of project finance is higher than individual home loans.
• In FY24, LIC Housing Finance reported a decrease in developer loan disbursements.
• The company's focus has shifted towards strengthening its asset quality.

Investment income for LIC Housing Finance stems from earnings on securities, bonds, and other financial instruments, acting as a supplementary revenue source. This stream enhances the company's financial stability and resource profile, allowing for diversified investments. The capacity to generate investment income reflects its strong financial standing and strategic asset allocation. As of March 2024, LIC Housing Finance's investments stood at approximately ₹2.87 Lakh Crore.

• Investment income provides a supplementary revenue stream.
• The company's financial flexibility enables a well-diversified resource profile.
• Investments include securities, bonds, and other financial instruments.
• As of March 2024, investments were approximately ₹2.87 Lakh Crore.