|Micro Housing Finance Corporation (“MHFC”) crosses Rs 10 cr in loan sanctions, ties up with Tata Housing on Mumbai project
Oct 07, 2010
Mumbai, India – MHFC, a housing finance company which aims to support urban lower income families and has provided over Rs 10 cr in loan sanctions, has tied up with Tata Housing on its newly launched “Shubh Griha” project in Vashind, Mumbai, which caters to a similar segment. MHFC will finance customers who are not able to easily access housing loans from mainstream banks mainly due to levels of income and also because of the lack of documentation, especially regarding proof of income. Buyers of Tata Housing “Shubh Griha” projects are normally allotted through a public lottery process, since applications far exceed the flats on offer, but given MHFC’s focus on families that are financially excluded and need primary housing desperately, Tata Housing has allotted a special reservation of 208 flats for MHFC customers.
According to the Chairman of MHFC, Mr. Madhusudan Menon, “This partnership is in continuation of our close relationship with Tata Housing, which encourages the MHFC mission of supporting end user buyers from lower income families, on all its projects aimed at this segment. We already have a tie up on the Tata Housing project at Boisar, which was an unqualified success, due to the unmet demand in this segment, and the reputation of the Tata Group for quality. We hope that families from the lower income informal sector will be encouraged to come forward and apply for homes in this new project, as the price set by Tata Housing is not only affordable (at about Rs 6 lakhs for a 360 sq ft flat), but the tie up with MHFC will also support financing, even for those without formal documentation”.
MHFC, incorporated in May 2008, aims to fill a major need - long term housing finance - for urban lower income families, particularly those who lack documentation and thus cannot access mainstream banks and housing finance companies. According to the Chairman of MHFC, Mr. Madhusudan Menon, “This underserved segment is estimated to represent more than 90% of the workforce, but has almost no financial institution catering to its housing finance needs. Microfinance has paved the way to lend to this segment in an economically sustainable way, but its focus is on short term loans. We hope that MHFC will be able to take this process further and move towards supporting longer term financing requirements, especially for an important basic need like housing.”
MHFC received its license from the regulator, the National Housing Bank (“NHB”) in Feb 2009 and started sanctioning loans in June 2009. It lends to those who want to buy a home for use as a primary residence and cannot get loans for a variety of reasons, but especially due to the lack of documentary evidence of income (e.g. vendors, tradesmen, drivers, etc who do not have salary certificates). It expects to provide loans of Rs 60 cr to 1500 borrowers in FYE 3/2011 - currently, loan sanctions are approx Rs 13 cr. For more information on MHFC, please visit http://www.mhfcindia.com
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