Looking beyond the salaried class

Venkatachari Jagannathan
16 November 2002

After selling freight space for German Railways, 55-year-old Dr Klaus Baetz is quite comfortable heading a housing finance company in India. He is the executive director, Birla Home Finance, representing BHW Holdings, which is an equal partner in the venture with Chambal Fertilisers and Chemicals, a K K Birla group company.

“Ultimately it is selling,“ he laughs. Baetz has the ambitious target of disbursing Rs 1,000 crore by 2005.

Originally Birla Home Finance was incorporated as a 100 per cent subsidiary of Chambal Fertilisers. The company took over ITC Classic Home Finance in 1999. In 2000, BHW Holdings, with an asset base of Rs 6,000 billion in Germany, was roped in as an equal joint venture partner. BHW Holdings has interests in housing finance, real estate, insurance, and private pensions in Germany.

The Delhi-headquartered Birla Home Finance has 10 branches and 17 satellite offices. The company plans to open 36 more satellite offices this fiscal.

Recently the company launched a unique savings-cum-loan scheme called Easy Home Loan Deposit Scheme. A first-of-its-kind product in the Indian home finance industry, the product targets consumers outside the tax bracket, who are unable to provide the kind of documentation required by housing loan providers. “All housing finance companies and banks are chasing the same rabbit,'' explains Baetz. The rabbit is essentially the salaried middle class, constituting only 30 per cent of the housing potential.

In an interview to Domain-b, Baetz talks about the product and the company's future plans.