"We are targeting a 100% growth under loans to developers this year," LICHF Chief Executive VK Sharma told PTI after the announcement of its annual results here. During FY12, LICHF's disbursals to developers fell to Rs 910 crore as against Rs 2,400 crore in the previous year.
Even though loans to individual borrowers grew 18% during the fiscal, the slowdown in project loans was cited as one of the reasons for a drop in net interest margin to 2.44% versus the year ago period's 3.08%.
Sharma said at its peak, loans to projects constituted for 12% of the company's books which has now come down to above 5%. "We plan to take it to over 8% through the jump in disbursals to project loans," said Sharma, who had to be hastily installed as the Chief Executive following the arrest of his predecessor R R Nair in the scam. Nair was arrested along with seven others by CBI in November 2010. According to CBI, Nair and others allegedly cleared lending to some borrowers against receipt of bribes.
A little known firm in the financial capital allegedly acted as an agent for getting the loan proposals cleared, according to the Central probe agency. Following the scam, the housing finance arm of the state-run insurance giant LIC had largely stayed away from loans to corporates. According to Sharma, loans to inviduals earn the company an interest of around 11 to 12%, while the same to corporates can get it over 15%.