Micro Housing Finance Corporation

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Micro Housing Finance Corporation. Micro Mortgages for Low Cost Housing 32 nd Meeting of the National Housing Bank New Delhi | August 30 2011. CONTENTS. The MHFC Story About MHFC Our Product Our Customers Our Projects Our Locations Current Status Partnerships Technology Challenges - PowerPoint PPT Presentation


  • 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:



  • 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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