Transcript Slide 1

Micro Housing Finance Corporation
Micro Mortgages for Low Cost Housing
32nd 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
Recommendations
Contact Us
Worli Village Slums, Worli, Mumbai
THE MHFC STORY
The Urban Context
30% of population is urban, living on less
than 2% of the country’s land
In Maharashtra, 60% of the total
population is now urban; in Mumbai,
54% of the city’s population lives in
slums in less than 4% of its land
India’s 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 years
Formal & Informal Low Income Housing, Prabhadevi, Mumbai
THE MHFC STORY
The Market
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LIG housing shortfall: 25 mn units
LIG housing market size: Rs. 5-10 tr
Mortgage finance market size: Rs. 4-8 tr
The Social Need
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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
BDD Chawl, Worli Naka, Mumbai
ABOUT MHFC
Vision
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To provide micro mortgage solutions
for the urban poor
Philosophy
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MHFC customer Kailash Naikwade in Sadashiv Peth, Pune
Market Driven Solutions to address
social issues
Inclusive Approaches to Lending
Sustainable and Scalable
Deploy best in class technologies
OUR PRODUCT
Work in progress at Om Shanti Nagar II in Lamba, Ahmedabad
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Loan Size: Up to Rs. 10,00,000
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Loan to Value Ratio: 80%
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Loan Term: up to 15 years
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Interest Rate: 12% to 14% (reducing)
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Security: mortgage of the house being
financed
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Covenants: bank account / ECS
OUR CUSTOMERS
MHFC customer Badri Thakur at his salon in Fanaswadi, Mumbai
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Average MHI: Rs. 8,000 to 20,000
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Primarily employed in the informal
sector
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Average HH Size: 5
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Households with multiple earning
members
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Currently living in rental housing or
illegal tenements
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Aspiration to own their own homes
OUR LOCATIONS
MHFC currently has an active presence in
over 35 projects across Urban India:
Mumbai
Pune
Nagpur
Surat
Ahmedabad
Indore
Kolkata
CURRENT STATUS
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NHB COR received in February 2009
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Capital received: Rs. 36.5 crores
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Commenced operations in June 2009
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Total Applications Received: 1231
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Total Loans Sanctioned: 1020
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Total Amount Sanctioned: Rs. 41.15
crores
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Average Loan Size: Rs. 4 lakhs
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Number of Approved Projects: 35
NB: All numbers updated as of August 26, 2011
Dream City apartments and row houses in Indore
TECHNOLOGY
MHFC seeks to use mobile /
telecom technology and data to:
MHFC customer Bharat Sharma in Meghdoot Nagar, Indore
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Enhance Credit: customer spending
on mobile phones as a proxy for
earnings
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Act as a Platform for:
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Product delivery
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EMI collection
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Communication with customers
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Reduce cost per transaction /
customer interaction
PARTNERSHIPS
MHFC seeks to partner with:
Banks
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Front-end product delivery
Customer information sharing
Housing Finance Companies
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Two-way customer referrals
NGOs, MFIs & Employers
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MHFC customer Jalinder Mhoprekar in Crawford Market, Mumbai
Outreach: customers and employees
Information dissemination and
marketing
CHALLENGES:
Customer Outreach
Awareness
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Lack of awareness on affordable
housing options and formal housing
finance
Self Exclusion
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Ineligibility  self exclusion from
seeking housing options
Creditworthiness
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Establishing credit credentials
Cost Escalation
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MHFC customer Rahul Singh in Boisar, Thane
Appreciation of flat prices faster than
increases in customer incomes
RECOMMENDATIONS
Develop Long Term Debt Markets
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Reduce asset liability mismatches
Improve access to off-shore markets
Priority Sector Definition
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Special status for loans <Rs. 10 lakhs
Lower Capital Requirements
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For small ticket size loans
Targeted Refinance Lines
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For loans < Rs. 10 lakhs
External Capital Borrowings
Vaishnavi Sai Complex in Virar (E), Mumbai
RECOMMENDATIONS
Automatic SARFAESI eligibility
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Eligibility for SARFAESI upon receipt of
COR from the NHB
Facilitating Downpayments
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Customers have reasonable current
incomes but low savings. Allow HFCs
to accept EMIs in advance to build up
down payments.
Educational Loans
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MHFC customer Chandrakant Kharvi in Bhayendar, Mumbai
Provision of education / vocational
lending for customers’ children to
enable future repayment capacity
CONTACT US
Micro Housing Finance Corporation
# 3 Victoria Building, 1st Floor
SA Brelvi Marg, Off Horniman Circle
Fort, Mumbai 400001
Tel: (022) 2266 0130 or 0427
Email: [email protected]
Website: www.mhfcindia.com
MHFC customer Laxman Thorat in Crawford Market, Mumbai