IDLC Finance Limited, the largest non-bank financial institution in the country, started its Consumer Finance Division in 1997. Its Consumer Division (CD) is by far the largest division in terms of client base and offers diverse range of Home Loans, Car Loans, va personal loans, and Deposit Products.

Irteza A. Khan, Deputy General Manager & Head of Consumer Division, IDLC joined IDLC in September, 2004. He took over responsibility as the Head of Consumer Finance Division in July, 2011 with special focus on various deposit schemes and consumer loan products. Are you looking to get a personal loan? Maybe to replace your old car which keeps breaking down? Like all loans, you are going to want to do some research before committing to 24 months etc. You could read this review for more information on loans. Something that everyone should know before applying for any type of loan is that your credit score is a vital factor of how much you’ll need to pay back after getting a loan. This is because it shows how reliable you are when it comes to repayments. A lot of people have never had a credit card to build a score but luckily, getting a credit card with no credit history is easier than ever now, Just get a card, build your history, and apply for loans that won’t charge you as much money.

With an Executive MBA in Marketing from North South University, Dhaka, & Chartered Accountancy (Intermediate) degree from the Institute of Chartered Accountants of Bangladesh (ICAB), Irteza A. Khan has got the CD of IDLC running at full swing with exceptional performance. In an exclusive interview, he shares his insights and understandings of the home loan market and real-estate industry.

BBF: How do you ensure good quality in your financial services? What has been the achievement?

Irteza Ahmed Khan: At IDLC, we created an enabling performance driven environment through investing in people, process, platform & premises (touch points), which gives us a leading advantage to secure business and deliver prompt service. We continuously invest in our sales teams for their training, development and performance management.

Our unique selling proposition is “Quick Decision & Quick Service” which is creating a real difference and encouraging clients to choose IDLC. We offer tailor made solutions to consumers and give decisions within 48 hours of loan applications. There is no bureaucracy in our process and we always remain transparent in our approach, documentation, and delivering service commitments. Our vision is to be the best financial brand in the country by focusing on quality growth, superior customer experience, and sustainable business practices.

IDLC has been awarded the highest safety and security credit rating “AAA”. This is the top rating awarded to any financial institution by an independent credit rating company.

BBF: As the Head of Consumer Division at IDLC, tell us which consumer products are most at demand now in the industry?

Irteza Ahmed Khan: Unsecured personal loans, especially credit cards have most demand in the industry (click on KingofKash.com/personal-loans/ for more information on personal loans). In secured lending side, home loans followed by car loans have demand among consumers. On the other side, Deposit Pension Scheme (DPS), Money Builder Schemes have highest demand followed by high interest savings and Fixed Deposit accounts.

BBF: What role do you see home loans from non-banking financial institutions playing in the greater economy?

Irteza Ahmed Khan: I believe NBFIs of the country have been successfully playing an important role in the greater economy by lending home loans to consumers. In fact, NBFIs took the bold lead over commercial banks in lending Home Loans from late nineties to meet growing demand of urban housing and assisted real estate developers, and various associated backward linkage industries as well as retail consumers through innovative lending arrangements.

IDLC, since its inception, has been playing a leading role in extending long term home loans to eligible clients to fulfill the dream of home ownerships. Besides, we are helping real estate developers and its associated industries through our lending operations.

BBF: What are the challenges and opportunities facing the home loan market at present?

Irteza Ahmed Khan: Real estate sector of the country has been currently badly affected with numerous key challenges. Influx of huge undisclosed money into the sector triggered sharp increase of demand. This bubble demand has put real estate companies into unhealthy competition that ended up with significant price increase of lands, apartments, and construction materials, and, thereby, forced regulator to intervene to control access to home loans from financial institutions and to withdrawal opportunity of investing undisclosed money in real estate along with tax benefit on home loans. On the other hand, Govt. utility connection authorities were not prepared with its limited resources to meet this unmanageable demand and ended up with long delay in service deliverables.

While on customer’s end, delay in project completion and restricted access to home loans made their payments to real estate companies irregular. As a cumulative result, apartment sales have declined more than 60% during last two years, and real estate and its associated sectors have been passing its worst ever business slump. Lack of coordination among key stakeholders is also a critical impediment for this stalemate situation.

BBF: How do you see the future of real estate sector vis a vis home loan market?

Irteza Ahmed Khan: With a rising population and increasing housing demand, apartment culture has been growing up sharply in Dhaka, Chittagong and rest of the metropolitan cities as standard of infrastructure facilities are far better in these areas compared to rest of underdeveloped or least developed regions in the country.

Currently, consumers are more interested to buy apartments than build their own houses due to high cost of land and construction, particularly in Metropolitan city areas. Even people who already own a house or apartment are still willing to buy another property which actually adds overall growth in demand.

A survey shows that in the upcoming 10 years, there will be a demand for more than 150,000 flats in or around Dhaka city only. If we continue to grow our GDP as projected, there will be gradual infrastructure developments across major divisional head quarters at least, if not other areas of the country, which will create growing demand for apartments among potential buyers and overall real estate sector as well as its associated backward linkage industries.

Home loan is a very basic consumer finance product and its demand in a densely populated country like Bangladesh with scarce land, limited infrastructure facility, and community living environment must have no alternative but to grow side by side with home loan requirements.

The good news is all of the stakeholders in the sectors: including but not limited to development partners, regulators, government agencies, environmental organizations, real estate developers, and loan financing companies, are aware of the potentials and have started taking initiatives in their respective ends which will eventually improve overall business outlook.

BBF: In your opinion, what can be done by the various stakeholders to recover growth of the real-estate industry?

Irteza Ahmed Khan: Real estate sector presently contributes around 15% in GDP. Moreover, it created lots of employment opportunities for semi skilled as well as unskilled work force. Suffering from poor implementation of policy & strategy and lack of coordination among stakeholders, this sector has so far been growing like mushrooms and created unhealthy competitions. Concerted efforts among all stakeholders are most important to reach towards a sustainable growth pathway in the real estate sector.

It has been found in a survey that the demand of apartment size ranging from 800 sft to 1,200 sft is the highest in Dhaka & Chittagong areas, and most of these clients are within middle income group. But currently, it is not possible for home loan providers to offer low cost loans as their funding price is very high.

Government alongside development partners should come forward with low cost & long term funding facility for meeting housing demands of lower and middle income group under joint venture or PPP projects with developers for building high rise small apartments on its huge unused lands. Real estate finance needs to be declared as “a special financial sector”, under which the home loan rate to be lowered compared to commercial lending rates for financial institutions. Special incentives are required to route developer companies to capital market and build low cost apartments in outskirt city areas.

“One Stop Service” desk in collaboration with all authorities might help a lot to ensure faster approval process. Our land documentation, registration, and transfer process requires immediate digitalization for greater interest. Besides, reduction of import duty on heavy capital machinery, introduction of tax incentives for home loan clients, banks, and financial institutions as well as real estate developer companies for investing in small apartments might increase the growth momentum to greater extent.