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In this episode of the EY India Insights podcast, Shreejit Menon, CEO, Niwas Housing Finance Limited, shares his perspective on the evolution of India’s housing finance sector and the growing opportunity in affordable housing. He discusses how urbanization, customer formalization and digital adoption are reshaping demand, underwriting and risk management. Shreejit also reflects on Niwas Housing’s transformation journey, the importance of governance and customer trust, and the role of technology in driving growth at scale.
Key takeaways
Affordable housing has evolved from a niche segment into a major growth opportunity, driven by urbanization, rising incomes and first-time homebuyers.
Leading lenders are embedding risk management strategies, using predictive analytics and real-time data to drive smarter growth.
Customer experience requires balancing geography-specific policies with empathy, recognizing that housing finance needs vary significantly across regions.
Housing finance companies operating in Tier 3 and Tier 4 markets are uniquely positioned to bridge last-mile credit gaps and unlock demand.
Superior profitability can be built on three pillars: robust distribution, disciplined underwriting and effective collections that perform across cycles.
Technology can add most value when it enhances customer experience while strengthening underwriting quality and risk management.
As we build Niwas, compliance, culture and data remain the foundation for sustainable growth, resilience and informed decisions.
Shreejit Menon
CEO, Niwas House Finance Limited
For your convenience, a full text transcript of this podcast is available on the link below:
Thank you for joining us today. Having witnessed the evolution of the housing finance sector from the HDFC era to your current role as CEO of Niwas Housing, and with a decade at the organization, how do you view this transformation journey?
Shreejit
I started my career with HDFC back in the early 2000s and that was a very different time when housing finance was still a business that only a few entities ran in the country and HDFC was the market leader at that point of time.
So the foundational years were good. The real estate prices were low, housing rate interests were coming down and so the business was booming.
And if I look at the last two decades, so much has happened over the last two decades, particularly in the last decade, which has been transformational. With the new government coming in, the focus is on affordable housing and that is the industry that I have been working in in the last decade and a half.
I would say exciting times. Niwas is my longest stint; I have spent nine years at Niwas and building something bottom-up has always been exciting for me. So, I would say it has been very exciting.
Pratik
What would you consider the most significant changes over the past two years, both at Niwas Housing and across the housing sector?"
Shreejit
At Niwas, we have had a period in the past where we almost had an existential crisis. It was the resilience of the team really got us out of that to a period where now we have reinvented ourselves and the brand Niwas has been at the center of it.
So, the brand changed including the tagline that came along with it – ‘Apka Niwas, Hamara Vishwas’ and the things that we have done around technology, leadership, processes. What really can be a better reaffirmation than getting institutional capital backing from the most pedigreed promoters in the country – the private equity fund which invested in us.
So today, I would say we are at a cusp of growth. We are now a name to reckon with in the affordable housing finance space and we are ready and confident to leverage on the India affordable housing story.
Pratik
Over the past five years, how have housing demand patterns evolved across the prime, affordable and informal segments, and what changes have you observed in customer behavior?
Shreejit
Housing is a structural grand story and when you think about housing finance in the past, you think about the prime segment and that is where much of the underwriting was happening. Over the last five to seven years, this decade, the affordable housing story has played out. And India is all about the low-income segment – that is where you see a lot of customers moving up as India progresses, the income levels of households going up and the demand for housing coming in.
The fundamental shift that we are seeing is the urbanization and that urbanization is moving people from the villages to the small towns looking at constructing their first homes and so affordable housing finance is now really not just a buzzword or a wave anymore; it is a tsunami that is hitting us. If you are in that space, you understand that segment well. By the way, this requires an infrastructure where you are going right up till the last mile. Banks do not have that infrastructure to be able to go up till the last mile and deliver credit and there is an inertia that this customer segment has.
And this is where housing finance companies like us – particularly the entities that operate in the markets that we operate in – Tier 3, Tier 4 markets, have a huge opportunity to leverage on the demand side of things.
Pratik
What are the structural shifts in customer behavior or the ecosystem in the last three years?
Shreejit
If you look at the last three years, there is a lot of data that is available now. The one biggest factor that we underestimate is the formalization of the customer that is taking place. Unlike earlier, we used to do a lot of on the field assessment, today, there is a lot of data that is involved - the GST data, the banking data and the identity data.
So, your ability to triangulate information from multiple data sources is one big advantage that you have in terms of underwriting these customers. Digital and the technology aspect is moving at a rapid pace. The 5G penetration that is happening across the country is giving access to these customers to reach out for products like housing finance and get their housing loan needs fulfilled.
Pratik
How have digital technologies transformed the way Niwas Housing assesses customer risk, manages fraud and makes lending decisions over the past three years?
Shreejit
Generally, we think of risk management and growth as two opposite pillars but that is not the case.
It is about integrating risk into your business decisions and getting risk management upstream, which means you are essentially baking in risk management right at the time of sourcing and using that as parameters to decide which customer will go straight through and which will go through a credit intervention. That is the first step – to be able to look at taking risk management upstream to also do a lot of predictive risk management rather than reactive risk management.
This includes predicting how the customers behavior will be in terms of his repayments, predicting other aspects of the customer which will help you take a better underwriting decision and serving the customer well – that is the fundamental shift that we are seeing. With data and with the leverage of new technologies, our ability to scale the business, keeping the risks intact, is something we see as a big benefit that we have today, which we did not have five years back.
Pratik
Niwas Housing serves customers across diverse geographies and typically operates in the INR10-15 lakh ticket-size segment. How do you design the customer journey to balance scale, reach and productivity while ensuring a seamless and enriching customer experience?
Shreejit
Customer experience is at the heart of what you have to do. And as you rightly pointed out, India has many states but every state is a country in itself; what works in South India may not work in the West and North.
So, when we look at our policies, we look at geography-specific policies, we go into those geographies, we sit with the teams out there, we understand the collateral framework, we understand the profile framework and then we design our policy which is aligned to the needs of that particular segment. So, it is not like one-size-fits-all policy that we do.
It is very important because you are dealing with an informal customer. So, while you have all of these policies in place, the ultimate piece is to deliver this with a lot of empathy, a lot of care, because this is a segment that requires that. So, balancing geography-specific policies and also delivering in a very empathetic manner to the customer on ground is what the differentiation is all about.
Pratik
As you scale up and accelerate, how do you ensure that risk and compliance are kept in pace? Also, how would you ensure the risk parameters also in intact when you grow?
Shreejit
One of the things that we have always believed is that we would like to go deep into geographies rather than go far and wide – that is the fundamental strategy that Niwas has always adopted.
When we started the business, we started with three or four states that we understood well. We built a strong leadership pipeline in those states and using the leadership is how we deeply penetrated into the interiors of that state. A fundamental requirement when running a business of this complexity into Tier 3, Tier 4 towns is to have a strong set of leaders at the top – that is one area where we have worked a lot.
Like I said earlier, we have triangulated information, we have looked at real-time risk parameters and the collection feedback that is coming in so that it can be fed back into our business rule engine and ensure that policies are updated real time.
So, we do not have to wait for an event to occur. We would actually predict that something is going to happen and then make the course correction accordingly.
Pratik
In terms of quality of growth, which are the matrices you would never compromise?
Shreejit
The foundation for our company has been strong governance. There is a huge premium that entities get for being well governed, for being high on compliances and that is something that we take great pride in.
The foundation of the organization should be a strong compliance-driven culture. We believe that we will do things which are sustainable over a longer period of time, rather than trying to do things which are very tactical. So, that is the first thing – the governance part of it. And with that comes in the culture - what is the culture that you are building?
So, there is a culture of meritocracy in the organization. There is a culture of deep operational understanding and there is a culture of collaboration. This becomes very important when you are running organizations like this that have a very collaborative workforce.
And in data there is truth. So, we are trying to build a lot of data to be able to give us insightful decisions rather than just rely on judgment.
While the entire segment is based on judgmental underwriting, you have to supplement it with a lot of data. So, compliance which becomes the foundational layer, culture which allows you to really build a very strong organization and then having a strong data at the back end – these are the three things that we are working on as we build Niwas.
Pratik
And what do you believe is the real value driver in the housing finance industry from sourcing to underwriting to collection more operate even in terms of profitability because ultimately you know, the the ROA and ROAE what drives that's right. So how, how would you answer that?
Shreejit
When it comes to value accretion, we think in terms of the return on asset (ROA) and the return on equity (ROE) to the stakeholders. The aspects that make that depend on how well your distribution is, which helps you build the deal pipeline.
But once the distribution is in place, it is the underwriting which is the moat. To my mind, if you have a strong underwriting base which can allow you to write across cycles and a strong collection mechanism which can preserve the underwriting that that you have done, then you are in a strong wicket.
Finally, it also comes down to customer acceptance. A strong customer referral rate matters because in this business, word of mouth matters.
So, if you have happy customers, they are going to refer you to more customers. That is how I have seen the largest of housing finance companies work. There is no branding, marketing, just word of mouth.
Underwriting will be the central to it, backed by a very strong trust-based approach to customer – these will help you survive in the long run.
Pratik
How is the company and also the industry adopting to digital transformation?
Shreejit
Until a few years back we had manual processes, application forms that had to be filled – all of that has gone away.
The processor have all got digitized. Now we are taking it to the next level in terms of saying how can we leverage on AI, how can we leverage on agentic. But a housing loan is 15-year product unlike a personal loan or some of the other short tenured products which are in fashion today.
Speed is important but speed is not the only criteria. What is important is to be able to deliver a strong customer experience and deliver it on the backing of a strong risk framework. So, when we think about our business, we think about not just about how to build the top-of-the-line funnel, which is the lead pipeline which comes in through multiple channels, which is another focus area because to have a sustainable business, you should have a strong top-of-the-line funnel.
Once they are in, then how is your underwriting engine in the middle, the risk-based underwriting approach, which again is very rule driven and built with all the data that comes back and then you apply algorithms on top of that. And you have to give all of this in real time to the underwriter. Human intervention has not gone out fully.
Ultimately, how do you make the decision taking of a human more informative real time for him to be able to take the right decisions – that is the way we are looking at digital technology to be able to provide the information in a cohesive format for people to take those decisions and to be able to help move the business forward.
Pratik
Where do you see the real competitive edge emerging from digital investments?
Shreejit
If you look at all the aspects, whether it is the turnaround time (TAT) and the ROI that you know TAT that can deliver, whether you look at the risk management and the credit cost that that you can save with a strong risk management framework on digital, it is the customer experience where this will matter the most.
Because if you are able to deliver customer experience in a way that he has not imagined before. And today when you think of customer experience, you are not just thinking within housing finance, you are thinking across industries.
So, if you are able to deliver strong customer experience in his engagement with you, that is going to be the single biggest driver in terms of the ROI on technology.
Pratik
EY has partnered with you in your entire journey and we saw it was a pleasure working with you. How would you, you know, describe your experience of working with the EY transaction team?
Sreejith
See, I don't want to give a generic answer to this question because I don't think it will do full justice to, to the efforts of the EY team. I think the experience has been extremely, extremely invaluable.
When we started this engagement with EY, it was of course going to be very intense and we were ready for that because it's basically about getting our organization bearing ourselves to to all the information points that EY wanted.
But one thing that stood out about EY was its deep domain experience and the understanding of housing finance, which I don't think we've seen with any other player in the space.
And so those conversations became very enriched. And sometimes there were discussions which were perhaps leading into debates, but they were very constructive debates.
And I think what EY understood and appreciated is, is the operators understanding of the business.
So it made the whole due diligence process, I would say very, very informative.
It helped us a great deal.
The proof of the pudding is that the capital raise happened at the end of it.
And I think I would say we became a better management team by virtue of the due diligence that EY had. So I would thank EY for going through that process with us and for giving us so many Nuggets of information in the whole process, which helped us understand our business better.
Pratik
Thank you so much, Shreejit. We have come to the end of the episode.
I would like to share that we had a great discussion on Niwas and on the entire housing finance industry.
Host
Pratik Parikh
Partner, Transaction Diligence, Strategy and Transactions, EY India
EY India Debt Management and Special Situations Services help organizations restructure, recover value, and adapt swiftly to disruption and complex challenges.
