Bridging the gap between housing finance companies and customers: Q&A with Ganesh Shankar, Homehub

This is the second post in a series on the India Housing Report focusing on digital technology and tech entrepreneurship in housing, where we try and examine what motivates entrepreneurs in this area, the challenges and potential of using digital solutions, and whether India is ready for such innovative products in the informal housing market. In this piece, we interview Ganesh Shankar, Co-Founder of Homehub, about their product and services.

Digital technology and tech entrepreneurship in housing is rapidly evolving in the Indian context, especially around the affordable housing segment. This is the second post in a series on the India Housing Report focusing on this space, where we try and examine what motivates entrepreneurs in this area, the challenges and potential of using digital solutions, and whether India is ready for such innovative products in the informal housing market. In this piece, we interview Ganesh Shankar, Co-Founder of Homehub, about their product and services. Edited excerpts:

IHR: What is the specific problem that you are seeking to solve in the housing sector? Is this problem specific to India?

Ganesh: Homehub aims to address the challenges faced by housing finance companies (HFCs) in monitoring the progress of self-constructed homes in their portfolio. The current process is manual and has external dependencies resulting in delays in disbursements and inconvenience to customers who have to follow up repeatedly for their disbursements. We plan to enhance this solution by providing construction management solution to individual customers while improving the quality of collaterals available to HFCs.

The problem is not specific to India. In fact, there are established companies in other parts of the world digitising the valuation process.  India is unique however given that large parts of the country continue to remain untapped when it comes to financing. Through our solution, HFCs can reduce the cost and time in monitoring their disbursements while managing their risks in a more cost-effective manner.

IHR: What motivated you to identify this as the problem? Tell us a bit about that journey.

Ganesh: Having spent close to 10 years in real estate and affordable housing, we realised that the organised developer segment was struggling to cater to the affordable housing demand. The problem is largely external and fuelled by market dynamics, land acquisition challenges, approval timelines, high cost of capital etc. We spent a couple of years offering tech solutions to Grade A developers through a real time business intelligence platform that could help the top management become more data focussed in their day to day operations. We were able to help improve the performance of the organisations by tracking metrics at a granular level. The experience was however different with the lower tier of developers who rarely had systems to capture information and were highly resistant to tech interventions, due to costs as well as mindset issues.

We also realised during our journey that the demand for affordable housing was being driven in large part by self-constructed homes- a segment that lacked the benefits of organisation, financing, scale and processes. We decided to address the challenges faced by the ecosystem through a suite of solutions beginning with the financiers and gradually moving towards the end customer.

IHR: How did you arrive at a technology-oriented solution? 

Ganesh: During our experience working on large developments, we had developed tech solutions which could help monitor progress of projects from a centralised location. We were able to use this experience to develop the solution. The challenge was in developing something that was simple for customers to use, while being robust enough to meet the compliance requirements of the banks. While this took a few iterations, communicating with the customers using our application helped us solve this challenge.

IHR: Tell us a bit more about how Homehub works. Who is it targeted towards and how does it help the end user?

Ganesh: We partner with HFCs who onboard the customers on to our app. The customer will then have to submit updates to the HFC when the stage of construction is reached. This is done by uploading geo-tagged and time-stamped photos and videos on the app, after which the information is submitted to the bank’s portal. If the credit manager is satisfied, the valuation report can be generated from the system and the disbursement can be done by the HFC.

Screenshot of Homehub interface showing photos and videos uploaded by customer.

The app is currently targeted to solve the problem HFCs face in managing the tranche disbursement process which otherwise is time consuming, difficult to track and prone to collusion. Based on our experience, the cost of monitoring for HFCs has reduced by more than 50% while the time has reduced by 5 days. Since the customer directly interfaces with the bank through our app, the possibility of collusion between the customer and valuator is eliminated.

Screenshot of Homehub interface showing tracking of construction progress.

We are now extending the capability of the application to provide a full stack service to the customers to manage their construction. This will be done through a tech platform that aids the customer in the design, estimations, financing, approvals contractors and material supply. The application will act as a managed market place that will provide customers access to the best contractors and suppliers in their region. The customer will be able to receive regular updates on cost, timelines and quality. 

IHR: What were the challenges involved in developing it in terms of funding, partnerships, talent?

Ganesh: The main challenge is in finding a solution that is extremely simple and modular to accommodate the requirements of different financial institutions and customers.  Early stage set ups like ours find it difficult to find the right talent given the limitations we have in offering attractive compensations. We were however fortunate to get some excellent people to support us both on the tech and operations front. We have been fortunate to partner with some very forward looking HFCs who have been very supportive and helped expedite the onboarding process. We haven’t raised any external funding at this stage.

Customer interface of Homehub app showing modularity of design.

IHR: At what stage is Homehub now and where do you see it going in the future in terms of scale and impact?

Ganesh: At present, we have rolled out the application with two HFCs and are in conversation with several others. We were able to move from the pilot to a full country rollout in a couple of months’ time. Our vision is to onboard at least 15 HFCs on to our application and help 5000 customers in Tier 2 and Tier 3 cities through our construction management platform over the next five years.

IHR: Do you think digital technology will have a transformative effect on the Indian housing sector?

Ganesh: Digital transformation of the realty sector started with the arrival of property discovery platforms in 2008, helping consumers make informed decisions while purchasing homes. Housing is often perceived as a tech resistant industry, but the sector has ushered in a new era of technology disruption in the last few years. Today prop-tech and construction tech start-ups are enabling consumers to purchase or invest in properties without even having to leave their homes using Augmented Reality (AR), Virtual Reality (VR) and cloud based technologies. Technology is increasing efficiency in construction through better control and monitoring, enabling sustainable developments and automating construction activities using robotics.

The digital transformation is not limited to real estate developers. New age start-ups have ventured into the unorganized sector of independent housing with contractor discovery platforms, construction monitoring and reporting apps, material supply platforms, deep tech mobile apps automating design, estimation and BoQ, remote monitoring and GIS mapping solution. These new age tech start-ups are changing the landscape in Tier 2 and Tier 3 cities and setting up new consumption patterns.

The thin profit margins in affordable housing, especially in independent houses, makes it difficult for private players to operate in this industry. Attaining scale and efficiently operating in multiple locations is the solution and we believe that technology combined with domain expertise will help solve this.

IHR: Drawing from your experience, what insights do you have for global housing practitioners?

Ganesh: The challenges in the housing sector are complex and require collaboration amongst various stakeholders. To begin with, efforts to further improve access to home finance need to be put in place in collaboration with the regulator (RBI). Also, addressing the low income housing space in isolation is not recommended. Solutions that can apply across income segments and can therefore benefit from scale need to be looked into for greater commercial viability. This will help attract greater private sector participation and more institutional finance in particular multilaterals and impact funds who have a greater appetite to fund affordable housing. Thus, technology will play a key role in demand aggregation; robust and efficient supply chain; efficient execution with optimum resource and machinery utilization, eventually helping construct cheaper than we are currently.

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