Repco Foundation for Micro Credit REPCO FOUNDATION FOR MICRO CREDIT FORMAL & INFORMAL LINKAGES IN...
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Transcript of Repco Foundation for Micro Credit REPCO FOUNDATION FOR MICRO CREDIT FORMAL & INFORMAL LINKAGES IN...
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
REPCO FOUNDATION FOR MICRO CREDIT
FORMAL & INFORMAL LINKAGES IN INDIAN
HOUSING SECTOR
Presentation by
G. Manickasundaram
Project Director
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
GROWTH OF THE INDIAN HOUSING SECTOR – IMPACT
Engine of domestic growth Backward & forward linkages with over 269
ancillary industries Second largest employment generator in the country Growth in demand is driven by
• improved affordability • Lower interest rate • Fiscal incentives • Stable property prices • Rising income levels• Increasing housing needs
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Formal• Banks• Financial Institutions • Capital Market• Cooperatives • NBFCs
Informal• Non institutional • Private sources
• Money lenders • Traders • Relatives & Friends • NGOs • SHGs
FORMAL AND INFORMAL LINKAGES
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
SOURCES FOR FINANCE FOR HOUSE CONSTRUCTION
Own
Friends/ relative
s
Cooperative
Govt. Private financi
al
Private non-
financial
Money lenders
Construction type
New Building
64.8 9.3 3.2 9.0 1.9 0.6 8.8
Addition to floor space
70.0 7.3 3.1 6.5 0.5 0.1 10.1
Maintenance / repair
71.0 8.0 3.3 4.4 0.4 0.4 10.1
By structure type
Pucca 65.3 9.2 3.1 8.4 2.0 0.4 9.3
Semi pucca
67.3 8.3 1.6 8.0 0.4 0.9 11.3
Kutcha 70.3 8.2 0.6 2.3 0.2 0.3 15.2
(% of monetary cost on construction)
Source: NSSO (2004)
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
THE REPCO GROUP
Headed by Repco Bank- a multi-state Cooperative Sector Institution co- promoted by GOI and Southern States of Tamil Nadu, Andhra Pradesh, Karnataka & Kerala. Head quartered in Chennai, it started operation in 1969 with the main objective
of rehabilitating repatriates. The Bank is governed by the Ministry of Home Affairs, Govt. of India.
Repco Home Finance Limited (RHFL), a housing finance subsidiary of Repco Bank started its operation in May 2000 and currently having a housing loan portfolio of Rs.1200 crore with 35 branches across Southern India.
Repco Foundation for Micro credit (RFMC), an NGO promoted by Repco Bank was registered, under Companies Act 1956 (Section 25). It is a not for profit entity for extending supporting services to SHGs financed by the bank solely with a
view to increasing the income level and eventually improving the standard of life of the target group.
Repco Infrastructure Development Company Limited (RIDCL), subsidiary of Repco Bank & RHFL came into being in July
2008 with the main objective of implementing PPP projects with Southern State Governments.
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Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Low Income Housing- Repco Experience
Areas of concernAreas of concern Reasons Reasons 1) Non–Availability of Property title1) Non–Availability of Property title Many own possession rights but not
ownerships.
2) Non–Availability of Income proof2) Non–Availability of Income proof •Unorganized laborers, seasonal nature of income .•Applicants working in their own farm.
3) Non–Availability of House 3) Non–Availability of House estimates / expenditure budgetestimates / expenditure budget
Civil Engineers / Contractors are present rarely.
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Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Low Income Housing- Repco Experience…
Areas of concernAreas of concern Reasons Reasons 4) Repayment Schedule generation4) Repayment Schedule generation With seasonal nature of income and
non-regularity, projecting continuous income stream is difficult
5) Delay in House Construction5) Delay in House Construction Unavailability of Building materials like bricks.
6) Minimum margin contribution 6) Minimum margin contribution There is initial delay in contributing the margin.
7) Abandoning of House 7) Abandoning of House Construction in the middle Construction in the middle
As it is not an income generating activity in most of the cases , they abandon it mid-way
8) High cost of Administration 8) High cost of Administration Low ticket size and more frequent need of interaction owing to lack of awareness
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Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Areas of concernAreas of concern Reasons Reasons 9) Need for revising the legal frame 9) Need for revising the legal frame workwork
(eg) Lands with Tribals / allotted to eligible beneficiaries under slum clearance schemes
10) Coordination with Govt. 10) Coordination with Govt. Departments for infrastructure Departments for infrastructure developmentdevelopment
Roads, Electricity, Water, Schools and Transportation
11) Improving the Quality of income 11) Improving the Quality of income of target groupof target group
All eligible members of the family to be optimally employed.
Low Income Housing- Repco Experience…
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Low Income Housing- Proposed REPCO Model
Based on our experience so far in dealing with housing for low income, unorganized sector households, the most striking revelation is that owing to traditionally non-income generating nature of investment for housing (for this strata particularly where rental/ speculation is not relevant) there is lack of motivation on part of the beneficiaries.
It is felt that the solution lies in promoting a Group Housing Concept through SHG Group Housing Concept through SHG
ModeMode.
Hence, REPCO evolved an integrated model for shelter cum income generation for these households through the parent Bank and its 3 subsidiaries-RHFL, RFMC & RIDCL. The core principle of the model would be somewhat similar to NHB’s PHIRA Scheme with executing agencies taking bigger and more active role in implementation.
With group guarantee, even without adequate collateral, mortgage could be created and repayment guaranteed thereby addressing the problems of non-availability of property title and income proof.
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Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
Low Income Housing- Proposed REPCO Model
Working of the ModelWorking of the Model
Organizing SHGs involved in similar
activity
Promoting SHGs
Vocational Training
Marketing of SHG Products
Income could be assessed based on the prevailing market rates of SHG products and sales volume
There would also be credit linkages.
Follow up and recovery at lower cost
Activity Role Effectiveness
Construction of Shelter cum work
shed
Assessing the shelter area requirement and work area requirement
Providing technical support
Planning the layout Construction & delivery
Preparing estimates / expenditure budget, avoiding
delay in construction or abandoning construction ,
providing technology support, low cost housing
Financial Assistance
Providing funding Arranging for
refinancing from concerned institutions
Taking care of initial margin requirement through family labour and locally available
materials of beneficiary
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Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com
BENEFITS OF THE SCHEME
Provides shelter to the poor downtrodden.
Gives opportunity for the unorganized labourers to own houses.
To benefit Women Self Help Group members to renovate their houses.
Shelter loan improves sustainability and the relationship among their members.
Repco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro CreditRepco Foundation for Micro Credit
www.repcohome.comwww.repcohome.comwww.repcofoundation.comwww.repcofoundation.com