Micro Housing Finance CorporationMicro Mortgages for Low Cost Housing

32nd Meeting of the National Housing BankNew Delhi | August 30 2011

CONTENTSThe MHFC StoryAbout MHFCOur ProductOur CustomersOur ProjectsOur LocationsCurrent StatusPartnershipsTechnologyChallengesRecommendationsContact UsWorli Village Slums, Worli, Mumbai

The Urban Context

30% of population is urban, living on less than 2% of the countrys land

In Maharashtra, 60% of the total population is now urban; in Mumbai, 54% of the citys population lives in slums in less than 4% of its land

Indias 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 yearsTHE MHFC STORYFormal & Informal Low Income Housing, Prabhadevi, Mumbai

The MarketLIG housing shortfall: 25 mn units LIG housing market size: Rs. 5-10 trMortgage finance market size: Rs. 4-8 tr

The Social Need90 % of workforce employed in informal sectorMonthly earnings: Rs. 5,000 to 30,000Excluded from mainstream housing finance

MHFC seeks to bridge this gap

THE MHFC STORYBDD Chawl, Worli Naka, Mumbai

VisionTo provide micro mortgage solutions for the urban poor

PhilosophyMarket Driven Solutions to address social issuesInclusive Approaches to LendingSustainable and Scalable Deploy best in class technologies

ABOUT MHFCMHFC 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 PRODUCTWork 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 homesOUR CUSTOMERSMHFC customer Badri Thakur at his salon in Fanaswadi, Mumbai

MHFC currently has an active presence in over 35 projects across Urban India:

MumbaiPuneNagpurSuratAhmedabadIndoreKolkata

OUR LOCATIONS

CURRENT STATUSNHB 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 deliveryEMI collectionCommunication with customers

Reduce cost per transaction / customer interaction

TECHNOLOGYMHFC customer Bharat Sharma in Meghdoot Nagar, Indore

PARTNERSHIPSMHFC customer Jalinder Mhoprekar in Crawford Market, MumbaiMHFC seeks to partner with:

BanksFront-end product deliveryCustomer information sharing

Housing Finance CompaniesTwo-way customer referrals

NGOs, MFIs & EmployersOutreach: customers and employeesInformation dissemination and marketing

CHALLENGES: Customer OutreachAwarenessLack of awareness on affordable housing options and formal housing finance

Self ExclusionIneligibility self exclusion from seeking housing options

CreditworthinessEstablishing credit credentials

Cost EscalationAppreciation of flat prices faster than increases in customer incomesMHFC customer Rahul Singh in Boisar, Thane

RECOMMENDATIONSVaishnavi Sai Complex in Virar (E), MumbaiDevelop Long Term Debt MarketsReduce asset liability mismatchesImprove access to off-shore markets

Priority Sector DefinitionSpecial status for loans

RECOMMENDATIONSMHFC customer Chandrakant Kharvi in Bhayendar, MumbaiAutomatic SARFAESI eligibilityEligibility for SARFAESI upon receipt of COR from the NHB

Facilitating DownpaymentsCustomers have reasonable current incomes but low savings. Allow HFCs to accept EMIs in advance to build up down payments.

Educational LoansProvision 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.comCONTACT USMHFC customer Laxman Thorat in Crawford Market, Mumbai

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