RURAL HOUSING FINANCE - National Housing Bank

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A-rural housing scenario
B- Sarva UP rural finance initiatives
Y P Issar
A. RURAL HOUSING SCENARIO
1.
1.
RURAL POPULATION
RURAL HOUSEHOLDS
1.
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RURAL HOUSES
2
2.Rural Households
 Rural households were
 9cr,
 11 cr and
 14 cr
 in 1981, 1991 and 2001 respectively
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Year 2001
Rural Population
Indian Population
Year 2026
103 cr
140 cr
Urban
28%
38%
Rural
72%
62%
Age Group(20-45 yr)
36.6%
40%
Urban Population
29 cr
53 cr
Rural Population
74 cr
86 cr
--
12 cr
Increase in Rural Areas
Rural Households
14 cr
Household Size
5.50
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3. Rural houses…….
 Average area of a rural house 64 sqm
 35% app. had over 50 sqm area
 -10% app. had over 100Sq.m area (In 1993 , this
percentage was 15%)
 About 32% were constructed more than 20 years ago.
 Land holding per capita in rural areas higher than urban
areas- construct on their own land.
 95.4% own their homes
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3. Rural houses…….
 Gap in desired and actual quality
 Houses classified as pucca, semi pucca, kutcha
 Share of pucca houses increased from 18.5% to 35.4%
from 1971 to 2001
68.5 % live in one or two room houses
-39.85 %in one room houses
 For average household of 5.2 persons, house size is
small.
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3. Rural houses……..
 Structural condition of rural houses-2001
 5.81 cr(45%)and 0.25cr(42.2%) of residential and
nonresidential houses in good condition
 6.28 cr(48.7%)and 0.32cr(53.3%) of residential and
nonresidential houses classified as livable
 0.81 cr(6.3%)and 0.03cr(4.5%) of residential and
nonresidential houses in dilapidated condition
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3. Rural Houses…….
 Exclusive Amenities-2001
 Access to safe drinking water- 80.5% ( 26.3% in 1981)
 Access to exclusive toilets- 26.3%
 Electricity connection-43% (14% in 1981)
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B. Sarva UP- rural finance
initiatives
 Sarva UP Gramin bank-an introduction
 Capital plus reserves=Rs 142 cr
 Deposits=2630, advances=1500 cr
 Net profit(PAT) = Rs 26.47 cr
 Deposit/advances accounts 22 lakh/3lakh respectively
 Gross/Net NPA 2.89%/0% respectively
 295 branches/1200 persons/13 districts in UP
 CASA =83% second highest amongst all RRBs
 Cost of deposits: 4.16%
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Our rural housing finance portfolio
 Our cumulative disbursements=
 1648 accounts Rs1882 lakhs
 Current year disbursements=
 305 accounts Rs 515 lakhs
 Outstandings
 1417 accounts Rs 1317 lakhs
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 Schemes for financing rural houses
 GJRHFS
 FINANCING TO Kisan Credit Card (KCC) holders
 Other borrowers
 Most of the loans are linked with the holding of
agriculture land
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Amount of Loan
 GJRHFS
 Construction of new dwelling units=up to Rs 5.00 lakh

Most of loans given up to Rs 2.00 lakh
 Up gradation/major repairs= up to Rs 1.00 lakh

No loans given under this
 KCC holders-Rs 2.00 lakh in addition to crop loan

Few loans given under this
 Others= need based
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Loaning Powers
 Rural sites
 up to Rs 5.00 lakh by branch managers
 up to Rs 30.00 lakh by higher authorities
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Rate of Interest(%)
 Period of loan :
floating rate fixed rate
 Up to 5 years
9.50
10.00
 Up to 15 yr
9.75
10.25
 Max= 10.50 % up to Rs 30 lakh
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Other charges
 Processing fee:
 1% of loan amount for loans above Rs 25000
 Issue of balance /interest certificate:
 Rs 50 per certificate
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Repayment
 GJRHFS
 Maximum 15 years

Mostly for 10 years
 Others
 Max 25 years
 Moratorium period:
 Maximum 18 months
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Margin/Security
 Margin:
 Fifteen percent of cost of construction
 Security
 Primary: mortgage of the house /hypothecation of
other assets
 or
 Collateral: Regd mortgage of agriculture land
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 UP Agricultural Credit Act 1973
 Construction/repair/extension of a house on abadi
land in rural area for personal use shall be deemed as
an agriculture purpose, for the purpose of this act
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Other aspects
 Reasonable growth
 Limited to few pockets
 So far low focus on this activity
 Lack of awareness amongst public
 Farmers using highly subsidized (5%) KCC funds for
housing
 Not covering non farmers/salaried class/low
income/disadvantaged groups
 Need product differentiation as per segments
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Other aspects ….
 Need to have specialized loan processing manpower
 High potential available in the command areas
 Average amount per loan to be enhanced
 Proposing housing finance hubs at
Noida/Ghaziabad/Meerut/Jhansi
 Proposing score based model for sanctioning to reach scale
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A few suggestions
 Application of interest be allowed up to annual basis
depending on the harvesting of crops in stead of
monthly basis as recently allowed in gold loans.
 Asset classification norms for rural housing loans be
allowed as applicable to Agriculture advances as the
repayment is mostly based on proceeds of crops.
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A few suggestions……
 Clean housing loans up to Rs 50000 be allowed for
those having assured income eg salaried /self
employed who have no other assets to mortgage.
 A Credit Guarantee Scheme for small housing loans
can help to cover larger number of low income
households.
 1991 census limit of 50000 population be shifted to
2001 census base with higher population level.
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A few suggestions…….
 GJRHS be given common publicity in vernacular press
 NHB refinance be allowed on portfolio basis removing
loan wise clauses from Memorandum of Agreement
especially for small loans up to Rs 10 lakhs
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A thought
 With 96 % home ownership, rural
people are investing short term
funds for housing sector.
 More rural housing finance can help
have major impact on their life
styles.
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Thank you
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