D Lakshminarayanan, MD, SLARDAM Home Finance
In a dusty lane in Thothukudi, southern Tamil Nadu, a Teashop contractor, begins his day with renewed confidence. A loan of ₹ 7.5 Lakh that Tok last year helped him expand both his position and his hiring work. In other places, a mosaic contractor in Nava Tiverupathi increased its business with a loan of ₹ 7 Lakh, while a fruit supplier in Salem used ₹ 9.5 Lakh to increase inventory and rationalization operations.
They are among a class for the rise of informal entrepreneurs that obtain access to formal finances, thanks to the commitment of Sundaram Home Finance to India of the small city through the Mys ‘Emerging Business’ segment (EB).
After the second wave of the pandemic, with the crowded metropolitan cities and the fierce competition, Sundaram Home began to look for new growth paths. At the end of 2022, the Chennai -based company focused on loans for small tickets in level 3 and 4 cities.
“He felt like the right time to rethink our approach,” says D Lakshminarayanan, Managing Director of Sundaram Home Finance.
A new play book
Released in October 2022, the EB segment is more than a product line: it is a new play book. It offers loans for small businesses (against properties) up to ₹ 20 Lakh and financing of affordable housing of ₹ 30 Lakh, aimed at self -employment such as masons, suppliers and customers of milk suppliers to aspiration with informal income flows.
Taking the business to each city felt like launching a startup. Hiring was a challenge, many of the applicants had a work history. “This work required more than numbers. I needed a street commitment and local empathy,” says Lakshminarayan.
Even internally, the transition from the staff of the management of large urban loans to semi -urban informal customers created mismatches. “You have to talk about the client’s language, both literally and metaphorically.”
Sundaram Home Tok, a cautious approach and directed by the investigation. The small teams moved in six to seven cities, conducting travel studies in three to four months to understand local customers. “We didn’t want to establish branches unless we had confidence in the segment,” he says.
That research showed a 50 percent strike rate, four to five viable borrowers for 10, which encouraged a pilot in 20 cities.
In addition, the SHF analysis focused on three key factors: market size (credit penetration), customer credit quality and sector performance.
“We continue to pursue the growth by the volume of IT with ascending NPA (assets without yield or loan breaches) is a red flag. On the other hand, the low volume with low NP is not attractive either,” he says.
“The Sweet Spot Lies in Markets Showing Moderate Growth with Manageax Risk. High Growth and Low NPas is The Dream, But Rare. So, We Focused on Balanced Segments Sacrifices Stable Returns Without Compastening on Credit Quality. Tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokhes tokches tokhes tokhes tokches tokhes tokhes tokhes tokches tokches tokkes tokches tokches tokches tokches tokches tokches tokches tokches tokches tokches tokches tokches tokches tokches tokkes tokke Tokkes toks tok -neopase tokches toks -nlebst 10’s ₹ 15 million rupees, we are in a hurry.
Once local hiring and research were in place, the approach focused on the viability of the business. Could each branch generate ₹ 1–2 million rupees monthly? “We map cost structures and toks a jump from faith, in advance, that investments were essential to unlock long -term value,” he says.
Starting in South Tamil Nadu and Madurai, Sussian expanded to Western regions such as Coimbatore and, more recently, Central and North Tamil Nadu. Today, the EB segment has 53 branches, including five in Andhra Pradesh, its first step in another state.
Crucially, EB borrowers are almost completely new, informal, unattended but solvent customers. “These are people who only need access. We are giving them tools to grow,” says Lakshminarayanan
The collections – of the real loan test – have been solid. “We could have grown faster, but we chose to move the block by block. The test is in the collections and, until now, we are happy,” he says.
Sundaram also sees significantly the other way around in affordable homes. There are two key demand pockets: on the outskirts of the meters, where industrial workers look for compact homes; And in narrower villages, where people self -constructed after buying land. Improved connectivity, economic activity and technology are feeding this trend. “It is worth taking advantage of both markets,” he feels.
Expansion
Under the leadership of Lakshminarayanan, the disbursements of sundaram home have grown from ₹ 1,250 million rupees in fiscal year 200 the assets under administration (AUM) stood at ₹ 14,000 million rupees in the fiscal year24.
In the EB segment, the company plans to double disbursements to approximately ₹ 400 million rupees in the next 12 months. With 400 employees today, the eyes of the EB segment launched the following 50 branches with a faster clip.
“This is a long -term play. We have invested in infrastructure, in people and in understanding the client. We are not chasing fast victories, it is building a ship to last,” says Lakshminarayanan.
From tea stalls to tile fabrics, the emerging commercial history of sundaram home is a cautious optimism and a quiet transformation driven by a deep belief in the power of the ambition of the small city.
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Posted on April 27, 2025
