Archive · 2 Sep 2026
Affordable lenders expand into LAP and MSME for higher returns
Affordable housing lenders used to focus mostly on home loans.
Now many are also lending money against property and to small businesses.
These newer loans usually earn more money than home loans.
That can improve lenders’ profits and reduce their dependence on one kind of customer.
However, the newer loans can also be riskier if borrowers do not repay.
Lenders therefore need strong checks and collection systems.
Aptus is highlighted as a lender with a significant non-housing business and high estimated margins.
The sector is expected to continue growing, but its success depends on controlling loan losses.
Lenders are moving beyond affordable home loans toward loan-against-property (LAP) and MSME lending to earn higher yields.
LAP and MSME products typically offer yields 150–200 basis points above housing loans, although they carry additional credit risk.
Systematix estimates sector-wide net interest margin rose from 5.9% in FY20 to 7.0% in FY26.
Aptus Value Housing Finance earns about 17–20% yields on non-housing loans versus roughly 14–14.5% on housing loans.
Systematix forecasts 18–23% annual PAT growth through FY29E, with loan growth in the low-to-mid 20% range.
- Who
- Affordable housing finance companies, including Aptus Value Housing Finance, and the Systematix research report.
- What
- Lenders are diversifying from affordable home loans into loan-against-property and MSME lending to improve yields and profitability.
- When
- The reported performance comparison covers FY20 to FY26, while forecasts extend through FY29E.
- Why
- LAP and MSME loans typically provide higher yields and help lenders diversify, though they also create additional credit risk.
- Higher product yields
- LAP and MSME products typically generate yields 150–200 basis points higher than housing loans.
- Sector NIM
- Aggregate net interest margin is estimated to have increased from 5.9% in FY20 to 7.0% in FY26.
- Sector RoA
- Aggregate return on assets is estimated to have risen from 3.1% in FY20 to 4.7% in FY26.
- Aptus non-housing yields
- Aptus Value Housing Finance’s non-housing businesses generate around 17–20% yields.
- Aptus housing yields
- Aptus’s housing loans generate roughly 14–14.5% yields.
- Aptus blended yield and NIM
- The company has an estimated blended yield of around 17% and average NIM of about 10%.
- Systematix forecast
- Systematix forecasts 18–23% PAT CAGR through FY29E and low-to-mid-20s loan growth.