Devising Financial Services Marketing Mix Strategies

Home loan• Housing has been identified as a priority sector by the Indian

Government. A number of schemes, particularly for weaker sections, were introduced from time to time.

• In addition establishment of a “National Housing Bank”, to support the financing of housing activities is another proof of such realisation.

• Government of developing and developed countries to have decent houses

• Governments at all level (national, state or local) a re deeply involved in housing market in a manner which differ markedly from interventions in product markets.

• The ability acquire housing stock –the effective demand-depend heavily on the income of the household and its access to saving, wealth long term housing finance.

• In developing countries housing demand is define as housing needs with ability and willingness to pay.

Operationalising Capital Formation

• World bank estimate indicate that the average ratio of mortagage credit supplied by the financed sector was 28% while in India it was around 10%.

• India’s progress strategy for housing development may be measured by Institutional processes:

• The first pillar establishment of State Level Housing Boards. An apex financial institution, the Housing and Urban Development Corporation (HUDCO) was entrusted with financing these efforts through a techno-financial link with these various house building agencies.

• The second pillar of the initial strategy was the corporative movement catering largely to the private sector

• The third pillar was the House Building Advance (HBA) made to employees of public sector and civil servants.

Housing Finance :The issues

• With formal institutional finance for home purchase being in its infancy in India, the major objectives of a future strategy include:

1. To enhance the loan origination process for housing throughout the country.

2. To develop an institutional network that would facilitate these origination processes.

3. To identify a potential resources base for the system as a whole.

4. To codify and simplify the legal system with respect to risk management of housing finance institution.

Supply Constraints

• Housing supply cope with future demand

• House price to household income ratio

• Land parceling and servicing

• The housing delivery system

Marketing Mix of Home loan

• Product:

1. Part-fixed, Part- Floating

2. Short-term Bridging loan

3. Step up Repayment Facility (SURF)

4. Flexible Loan Installment Plan (FLIP)

5. Smart Fix Home Loan

6. Home Savers

• Prices

• Promotion

• Place

• People

• Process

• Physical Evidences

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