Post on 29-Jan-2016
Micro Housing Finance Corporation
Micro Mortgages for Low Cost Housing
32nd Meeting of the National Housing BankNew Delhi | August 30 2011
CONTENTSThe MHFC Story
About MHFCOur Product
Our CustomersOur Projects
Our Locations
Current StatusPartnershipsTechnologyChallenges
RecommendationsContact Us
Worli Village Slums, Worli, Mumbai
The Urban Context
30% of population is urban, living on less than 2% of the country’s land
In Maharashtra, 60% of the total population is now urban; in Mumbai, 54% of the city’s population lives in slums in less than 4% of its land
India’s urban population (285 million) has increased five fold over the past 50 years, and is projected to keep increasing to reach 50% of the total population in the next 30 years
THE MHFC STORY
Formal & Informal Low Income Housing, Prabhadevi, Mumbai
The Market• LIG housing shortfall: 25 mn units • LIG housing market size: Rs. 5-10 tr• Mortgage finance market size: Rs. 4-8 tr
The Social Need• 90 % of workforce employed in informal
sector• Monthly earnings: Rs. 5,000 to 30,000• Excluded from mainstream housing
finance
MHFC seeks to bridge this gap
THE MHFC STORY
BDD Chawl, Worli Naka, Mumbai
Vision• To provide micro mortgage solutions
for the urban poor
Philosophy• Market Driven Solutions to address
social issues• Inclusive Approaches to Lending• Sustainable and Scalable • Deploy best in class technologies
ABOUT MHFC
MHFC customer Kailash Naikwade in Sadashiv Peth, Pune
• Loan Size: Up to Rs. 10,00,000
• Loan to Value Ratio: 80%
• Loan Term: up to 15 years
• Interest Rate: 12% to 14% (reducing)
• Security: mortgage of the house being financed
• Covenants: bank account / ECS
OUR PRODUCT
Work in progress at Om Shanti Nagar II in Lamba, Ahmedabad
• Average MHI: Rs. 8,000 to 20,000
• Primarily employed in the informal sector
• Average HH Size: 5
• Households with multiple earning members
• Currently living in rental housing or illegal tenements
• Aspiration to own their own homes
OUR CUSTOMERS
MHFC customer Badri Thakur at his salon in Fanaswadi, Mumbai
MHFC currently has an active presence in over 35 projects across Urban India:
Mumbai
Pune
Nagpur
Surat
Ahmedabad
Indore
Kolkata
OUR LOCATIONS
CURRENT STATUS• NHB COR received in February 2009
• Capital received: Rs. 36.5 crores
• Commenced operations in June 2009
• Total Applications Received: 1231
• Total Loans Sanctioned: 1020
• Total Amount Sanctioned: Rs. 41.15 crores
• Average Loan Size: Rs. 4 lakhs
• Number of Approved Projects: 35
NB: All numbers updated as of August 26, 2011
Dream City apartments and row houses in Indore
MHFC seeks to use mobile / telecom technology and data to:
• Enhance Credit: customer spending on mobile phones as a proxy for earnings
• Act as a Platform for: Product delivery EMI collection Communication with customers
• Reduce cost per transaction / customer interaction
TECHNOLOGY
MHFC customer Bharat Sharma in Meghdoot Nagar, Indore
PARTNERSHIPS
MHFC customer Jalinder Mhoprekar in Crawford Market, Mumbai
MHFC seeks to partner with:
Banks• Front-end product delivery• Customer information sharing
Housing Finance Companies• Two-way customer referrals
NGOs, MFIs & Employers• Outreach: customers and employees• Information dissemination and
marketing
CHALLENGES: Customer Outreach Awareness
• Lack of awareness on affordable housing options and formal housing finance
Self Exclusion• Ineligibility self exclusion from
seeking housing options
Creditworthiness• Establishing credit credentials
Cost Escalation• Appreciation of flat prices faster than
increases in customer incomes
MHFC customer Rahul Singh in Boisar, Thane
RECOMMENDATIONS
Vaishnavi Sai Complex in Virar (E), Mumbai
Develop Long Term Debt Markets• Reduce asset liability mismatches• Improve access to off-shore markets
Priority Sector Definition• Special status for loans <Rs. 10 lakhs
Lower Capital Requirements • For small ticket size loans
Targeted Refinance Lines• For loans < Rs. 10 lakhs
External Capital Borrowings
RECOMMENDATIONS
MHFC customer Chandrakant Kharvi in Bhayendar, Mumbai
Automatic SARFAESI eligibility• Eligibility for SARFAESI upon receipt of
COR from the NHB
Facilitating Downpayments• Customers have reasonable current
incomes but low savings. Allow HFCs to accept EMIs in advance to build up down payments.
Educational Loans• Provision of education / vocational
lending for customers’ children to enable future repayment capacity
Micro Housing Finance Corporation# 3 Victoria Building, 1st FloorSA Brelvi Marg, Off Horniman CircleFort, Mumbai 400001
Tel: (022) 2266 0130 or 0427Email: contact@mhfcindia.comWebsite: www.mhfcindia.com
CONTACT US
MHFC customer Laxman Thorat in Crawford Market, Mumbai