PNB Housing Finance, one of India’s leading housing finance companies, has set an ambitious target for the next two years. In a recent interview with CNBC-TV18, the company's CEO and MD, Girija Kumar, revealed that the retail loan book is expected to cross ₹1 lakh crore by FY27, driven by strong growth in the affordable and mid-income housing segments.

Currently, PNB Housing’s retail loan book stands at around ₹69,000 crore. The company is focusing on strengthening its retail operations, expanding into newer geographies, and sharpening underwriting processes to achieve this milestone. It also aims to rebalance its overall portfolio, with a sharper tilt towards retail lending, gradually phasing out corporate exposure.

Retail Strategy to Drive Growth by FY27

PNB Housing Finance’s transformation strategy, Project Vikas, is bearing fruit. The initiative, launched two years ago, focused on retail expansion, digitisation, and customer-centric processes. As a result, the company saw its retail disbursements rise 39% YoY in Q1 FY25, and the share of retail loans now constitutes 95% of the total loan book, up from 88% two years ago.

CEO Girija Kumar noted that with India’s housing demand expected to remain buoyant over the medium term, especially in the affordable segment, PNB Housing is well-positioned to cater to first-time homebuyers. The company is also strengthening its distribution network, with 25–30 branches expected to be added annually.

Share of Residential Housing Loans Increased by 14% in 11 Years

According to data from the Reserve Bank of India (RBI) and other market research firms, the share of housing loans in overall bank credit has seen significant growth over the past decade.

Between FY12 and FY23, the share of residential housing loans in gross bank credit rose from 8% to 11.4%. This upward trend reflects a rising demand for homeownership, government-backed housing schemes, and lower interest rates offered during the pandemic.

Growth in Housing Loans vs. Total Bank Credit

Financial Year	Gross Bank Credit (₹ Lakh Cr)	Housing Loan Share (%)	Total Housing Loans (₹ Lakh Cr)
FY12	47.5	8.0	3.8
FY18	80.6	10.2	8.2
FY23	136.7	11.4	15.6

Housing loans have not only increased in percentage share but also in absolute value, growing more than 4x in the last 11 years. This signifies a shift in consumer borrowing patterns, from short-term consumption loans to long-term asset creation.

Moreover, public and private banks have both stepped up their disbursal of housing loans. While public sector banks dominate the market with over 60% share, housing finance companies (HFCs) like PNB Housing are catching up due to their customised offerings and faster processing.

Market Share of Housing Loans by Lender Type (FY23)

Lender Type	Market Share (%)
Public Sector Banks	60.4%
Private Banks	24.6%
Housing Finance Companies	15.0%

The rise of fintech-driven HFCs, along with supportive government policies like PMAY (Pradhan Mantri Awas Yojana) and CLSS (Credit Linked Subsidy Scheme), has played a key role in broadening access to housing credit, particularly in Tier 2 and Tier 3 cities.

These Indian Cities Are the Most Affordable to Buy a House Right Now

Affordability plays a huge role in housing finance penetration. According to a recent report by property consultant Knight Frank, several Indian cities remain attractive for homebuyers based on affordability index scores, which measure EMI as a % of household income. Cities with lower ratios are considered more affordable.

Most Affordable Cities in India – 2024

City	Affordability Ratio (EMI as % of income)
Ahmedabad	23%
Pune	26%
Kolkata	26%
Bengaluru	28%
Hyderabad	30%
Chennai	30%
Delhi NCR	30%
Mumbai	51%

Ahmedabad tops the list as the most affordable city in India to buy a home. With an EMI-to-income ratio of just 23%, it leaves enough room for borrowers to manage other financial obligations. Pune and Kolkata, at 26%, also offer a healthy mix of infrastructure, job opportunities, and moderate pricing.

While Mumbai remains the least affordable, with a whopping 51% affordability ratio, developers have begun offering smaller ticket-size homes, making them relatively accessible.

As PNB Housing Finance aims to expand its retail base, focusing on these high-affordability markets could help it acquire quality customers and manage asset quality risks better.

Conclusion

With housing demand on the rise and retail borrowers increasingly looking for trusted financing partners, PNB Housing Finance is betting big on the next wave of growth. The company’s retail-first approach, aggressive branch expansion, and alignment with affordable housing trends set it on a strong path to achieving its ₹1 lakh crore loan book target by FY27.

As homeownership continues to remain a core aspiration across urban and semi-urban India, players like PNB Housing Finance are well-positioned to bridge the demand-supply credit gap, making housing finance more accessible, and more importantly, sustainable for millions of Indians.

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