micro housing finance corporation national housing bank - asia pacific union: housing finance...
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Micro Housing Finance Corporation
National Housing Bank - Asia Pacific Union: Housing Finance
January 30-31 2012New Delhi
Micro Housing Finance Corporationwww.mhfcindia.com
India’s Housing ShortageThe Market
• LIG housing shortfall: 25 MM units
• LIG housing market size: Rs. 5-10 tr
The Social Need
• 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
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Worli Slum, Mumbai
Micro Housing Finance Corporationwww.mhfcindia.com
About MHFC
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Chandrakant Kharvi, Welder in Mumbai
Micro Housing Finance Corporationwww.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
Our Product
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Kailash Naikwade, Tailor in Pune
Micro Housing Finance Corporationwww.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
Our Status
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Bharat Sharma, Tailor in Indore
Micro Housing Finance Corporationwww.mhfcindia.com 1
Our Customers• Average MHI: Rs. 8,000 to Rs. 20,000
• Primary employed in the informal sector
• Breakup of Portfolio by Occupation Type
I
• Average HH Size: 5
• Households with multiple earning members
• Currently living in rental housing or illegal tenements
• Aspiration to own their own homes
Salaried 37%
Self Employed 34%
Salaried & Self Employed 29%
Micro Housing Finance Corporationwww.mhfcindia.com
Customer
• Awareness (projects / MHFC)
• Credit (untested / self exclusion)
• Time to decide (so outbooked)
• Pricing going up (out of reach)
Construction (Builder)
• Delivery risk
• Changing Segments
• Low Priority
Capital
• Debt (Tenor / Pricing / Start Up)
• ECBs not permitted
• NHB Refinance is post fact and based on outstandings
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Our Challenges
Ibrahim Shaikh, Garage Servicer in Mumbai
Micro Housing Finance Corporationwww.mhfcindia.com
Advantages
• Knowledge of the target (informal sector) market
• Customer acquisition and outreach
• Credibility
• Collection mechanisms
Roadblocks
• Long term lending
• Interest rate mis-match / adjustment
• Localized operations
• Lack of clarity on regulations
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MFIs & Housing Finance
Jalinder Mhoprekar, Spice Vendor in Mumbai
Micro Housing Finance Corporationwww.mhfcindia.com 9
Conclusions
HFCsRisk Management
& Back Office Capabilities
MFIsCustomer Acquisition
& Collection Mechanisms
+
Successful Micro Mortgage Finance
Rahul Singh, Auto Servicer in Thane
Micro Housing Finance Corporationwww.mhfcindia.com 10
Contact UsMicro Housing Finance Corporation# 3 Victoria Building, 1st FloorSA Brelvi Marg, Off Horniman CircleFort, Mumbai 400001
Tel: (022) 2266 0130 or 0427Email: [email protected]: www.mhfcindia.com