Micro Housing Finance Corporation
National Housing Bank - Asia Pacific Union:
Housing Finance
January 30-31 2012
New Delhi
India’s Housing Shortage
The Market
•
LIG housing shortfall: 25 MM units
•
LIG housing market size: Rs. 5-10 tr
The Social Need
Worli Slum, Mumbai
•
Even if houses built, 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
Micro Housing Finance Corporation
www.mhfcindia.com
3
About MHFC
Vision
•
To help urban low income / financially excluded families
own a home
Philosophy
Chandrakant Kharvi, Welder in Mumbai
•
Value for Money for Many
•
Market Driven Solutions to address social issues;
•
Inclusive Approaches to Lending;
•
Sustainable and Scalable;
•
Deploy best in class technologies
Strategy
•
Similar to other HFCs (product / processes / spreads)
except
(a) customer segment
Micro Housing Finance Corporation
www.mhfcindia.com
(b) project based
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Our Product
Kailash Naikwade, Tailor in Pune
Micro Housing Finance Corporation
www.mhfcindia.com
•
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)
•
Fees: 1% sanction; NIL prepayment
•
Security: mortgage of the house being financed
•
Covenants: Bank Account (ECS) / Insurance
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Our Status
Bharat Sharma, Tailor in Indore
Micro Housing Finance Corporation
www.mhfcindia.com
•
Incorporated June 2008 / NHB license Feb 2009 /
Commenced operations in June 2009
•
Equity Capital: Rs. 36.5 cr
•
Total Amount Sanctioned: Rs. 52 cr
•
Total Amount Disbursed: Rs. 30 cr
•
Average Loan Size: Rs. 4 lakhs
•
Average LTV: 65%
•
Average Tenor: 12 years
•
Past Dues (till date): 0
•
Number of Approved Projects: 50
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Our Customers
• Average MHI: Rs. 8,000 to Rs. 20,000
• Primary employed in the informal sector
• Breakup of Portfolio by Occupation Type
Salaried
37%
Self Employed
34%
Salaried & Self Employed
29%
I
• Average HH Size: 5
• Households with multiple earning members
• Currently living in rental housing or illegal tenements
• Aspiration to own their own homes
Micro Housing Finance Corporation
www.mhfcindia.com
1
Our Challenges
Customer
•
Awareness (projects / MHFC)
•
Credit (untested / self exclusion)
•
Time to decide (so outbooked)
•
Pricing going up (out of reach)
Construction (Builder)
Ibrahim Shaikh, Garage Servicer in Mumbai
•
Delivery risk
•
Changing Segments
•
Low Priority
Capital
Micro Housing Finance Corporation
www.mhfcindia.com
•
Debt (Tenor / Pricing / Start Up)
•
ECBs not permitted
•
NHB Refinance is post fact and based on outstandings
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MFIs & Housing Finance
Advantages
•
Knowledge of the target (informal sector) market
•
Customer acquisition and outreach
•
Credibility
•
Collection mechanisms
Roadblocks
Jalinder Mhoprekar, Spice Vendor in Mumbai
Micro Housing Finance Corporation
www.mhfcindia.com
•
Long term lending
•
Interest rate mis-match / adjustment
•
Localized operations
•
Lack of clarity on regulations
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Conclusions
HFCs
Risk Management
& Back Office
Capabilities
MFIs
+
Customer Acquisition
& Collection
Mechanisms
Rahul Singh, Auto Servicer in Thane
Successful Micro Mortgage Finance
Micro Housing Finance Corporation
www.mhfcindia.com
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Contact Us
Micro Housing Finance Corporation
# 3 Victoria Building, 1st Floor
SA Brelvi Marg, Off Horniman Circle
Fort, Mumbai 400001
Tel: (022) 2266 0130 or 0427
Email: contact@mhfcindia.com
Website: www.mhfcindia.com
Micro Housing Finance Corporation
www.mhfcindia.com
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