JEDDAH: India's Housing Development Finance Corporation (HDFC) is currently in talks with Saudis to set up two home finance companies in the Kingdom, said Renu Sud Karnad, HDFC's joint managing director.
"We signed an agreement for this during the landmark visit of Custodian of the Two Holy Mosques King Abdullah to New Delhi in January 2006," Karnad, a well-known Indian businesswoman, told Arab News.
"We are now providing technical assistance to Saudi firms to set up one or two companies such as HDFC in order to give loans to Saudis. We are working on two, and within six months we'll be able to finish one," she explained.
Karnad, who has been working with HDFC for the last 31 years, highlighted her company's expertise in providing consultancy services. "We have set up housing companies in Cairo, Bangladesh, Sri Lanka, and Mali," she said.
Karnad pointed out that HDFC would not have any equity in the new Saudi housing companies. "We have our own limitations and Saudis do not need any equity because they are financially well off."
Speaking about the India Homes Exhibition that was staged in Riyadh, Jeddah and Alkhobar, she said it was aimed at helping Indian expatriates in the Kingdom to invest their money in viable real estate projects.
The fair, organized by HDFC, brought together 22 leading Indian developers under one roof. Karnad opened the show at Trident Hotel in Jeddah. The fair offered 30,000 units of 2-3 bedrooms in 12 major Indian cities.
"The exhibition attracted more than 3,000 people and we expect a business of about Rs 400 million within a month," she said.
Karnad, who was the first high-ranking Indian businesswoman to visit Saudi Arabia, said she was impressed by the country. "I was a bit nervous on arrival at Jeddah airport, fearing how the immigration officers would respond, but was very happy when they smiled at me. It was a pleasant surprise."
She underscored the strength of the Saudi economy. "It's one of the countries that is not affected by the global financial crisis." Saudi Arabia is a major market of HDFC, which has offices in Riyadh, Jeddah and Alkhobar. Rezayat Group is its partner in the Kingdom.
Karnad said HDFC had given loans worth nearly Rs1.2 trillion to build three million houses since it was formed in 1977. "We are addressing the needs of low and middle income Indians. We provide easy installment facilities to our clients in order to help them own a house without much difficulty," she said.
In addition to the three Saudi cities, HDFC has overseas offices in Singapore, London, Dubai, Sharjah, Abu Dhabi, Qatar, Oman and Kuwait. "Our offices abroad provide advice to potential clients about reliable developers."
Karnad emphasized her corporation's determination to provide excellent services to the public. "We are proud that we benchmark service," she said. NRIs can obtain information about HDFC from Indian missions abroad.
Despite the subprime mortgage crisis in the US, which sent shock waves around the world, Karnad said her company had performed well in 2008, posting a 27 percent profit. "The subprime mortgage crisis was limited to the US and Europe. India was not at all affected by it," she pointed out.
She said excessive lending by financial institutions without checking the ability of clients to pay back was one of the main reasons for the subprime debacle in the US. "We extend loans after thoroughly checking the income sources of applicants. We have also put a condition that the client asking for a house loan should bear at least 15 percent of the project's cost," she said in speaking about the measures taken by HDFC to ward off a subprime crisis.
