Ummeed In News

Ummeed Housing Finance secures $5.6M from Lok Capital & Duane Park

With a focus on northern and central India, Ummeed is looking to use the fresh capital to fuel its expansion plans to newer locations in the same belt

Delhi-based affordable housing finance company Ummeed Housing Finance has raised Rs 36 crore ($5.6 million) from existing investors Lok Capital and Duane Park.

The investment in the series-B round has been made from Lok Capital's third fund Lok Capital Growth Fund. With this, the total capital raised by the company touches Rs 69 crore.

With a focus on northern and central India, Ummeed is looking to use the fresh capital to fuel its expansion plans to newer locations in the same belt. Ummeed will look at making investments in social, mobile, analytics and cloud technologies in the near future.

“Our current hubs are in Delhi, Chandigarh and Jaipur with six new centres coming up in FY18. We are targeting tier-II cities with a population of over 10 lakh,“ said founder Ashutosh Sharma.

“We aim to build scoring modules that can improve operational efficiencies, reduce turnaround time and build robustness around the credit quality of the portfolio.“

Ummeed offers home loans, loans against property as well as insurance advisory services to customers with informal income, semi urban and rural borrowers who are not adequately banked. It provides loans ranging from Rs 3-25 lakh for a tenure of 2-20 years. The maximum loan-to-value ratio is 70-75%.

“Given that formal lenders are increasingly focusing on large ticket-size loans catering mainly to the mid-high income segments, there is an acute shortage for housing finance for lower income levels. Given the large market size, Ummeed's focused approach, strong underwriting capabilities and vision to leverage technology will help the company become a significant player in the space,“ said Vishal Mehta, cofounder, Lok Capital.

Lok Capital is scouting for investments in the areas of SME finance, affordable housing finance and digital or tech-enabled financing within financial inclusion.

The fund is also looking to close 2-3 investments by 2017-end in the areas of agriculture and health care. Nine-month-old Ummeed has set itself an ambitious growth target for assets under management that currently total Rs 15 crore.

“We are looking to ramp up our current asset base to Rs 125 crore by the end of FY18. We expect a positive bottom line in the full year of operation,“ Sharma told ET.