Page 17 - Banking Finance September 2018

HOUSING

HOUSING

NEWS
NEWS
NEWS
NEWS
NEWS

LIC Housing Finance to IFC to invest $25 million in Mahindra Rural Housing
provide loan at conce- Finance
International Finance Corp. member of the World Bank Group, will invest $25
ssional rate to flood vic- million in Mahindra Rural Housing Fi-
tims in Kerala nance Ltd.
LIC Housing Finance will offer loans IFC said that the housing finance sub-
up to Rs 15 lakh at concessional rate sidiary of Mahindra Finance will uti-
of 8.5 percent to customers in flood lize the funds to offer small home
affected areas of Kerala. loans.
Under the scheme, loan up to Rs 15 "There is high demand for affordable
lakh will be extended for properties housing, particularly in rural and
located in the flood affected areas of semi-urban areas. The supply is beginning to increase. IFC's investment will send
Kerala for the purpose of reconstruc- a positive signal to investors, increasing confidence and encouraging potential
tion, repair, renovation or up-grada- creditors to provide long-term debt to this sector," said Arun Kumar Sharma,
tion of dwelling units, the company chief investment officer, IFC.
said in a statement.
Sharma added that the investment will not only help in improving the living
Announcing the plan Monday, LIC standards of the rural population, but will also help generate jobs in the hous-
Housing Finance said 'Kerala Flood ing construction industry.
Scheme' will be offered at 8.5 per- As on 30 June, Mahindra Rural Housing's loan book was at Rs.7,083 crore. About
cent special rate of interest. Custom- 85% of its portfolio is in the rural areas. For the April-June quarter, the company's
ers can apply for loan till October 31. net profit stood at Rs.31 crore.

Also as a relief for its existing custom-
It has extended loans to over 700,000 households across India.
ers, the company has decided not to
"Most housing finance in rural areas is for incremental construction or comple-
levy any additional charges arising
due to late payment of EMI for the tion of homes, and the lack of appropriately designed product options is a key
month of August and September challenge. We identified this need and built an innovative business model around
2018, it said further. it. There is great potential for growth in this segment. This association with IFC
will help us capitalize on these opportunities, while making a huge social impact,"
All ancillary charges resulting from said Ramesh Iyer, vice-chairman and managing director, Mahindra Finance.
such late payments and recovery
charges also have been waived till The average loan ticket-size for Mahindra Rural Housing is around $1,200. Ac-
cording to the 2011 Census, India has a housing shortage of 62.5 million units,
September 2018.
with over 90% of the shortage in low-income categories.

BANKING FINANCE | SEPTEMBER | 2018 | 17