Page 333 - 2019 6th AFIS & ASMMA

mortgage market has grown quite rapidly, it's almost uniquely serving the better quality portfolios than they would otherwise have had. Now it's
top 30 percent of the income distribution; 98 percent of all credits were to almost kind of a gold rush. All of the lenders are developing products,
the top 30 percent of the income distribution, meaning 70 percent of the realizing that this is a market for potentially hundreds of millions of
population had no access whatsoever to housing finance. The key issue households, and if done right, it is profitable.
was informality of both income, so you don't have salary slips, you don't
have a formal employer, which makes underwriting difficult. But then
also informality of property, you can't get the proper title documents.
Many people have property rights, so they're not squatting on the land,
but they don't have the full protected legal title to the property. So, we
tried to come up with a solution working with a National Housing Bank.
We channeled a hundred-million-dollar line of credit. So you have this Session II
matrix and we split up the target population into, and all of this was for
low income people, earning up to about nine thousand dollars, which
itself was already a challenge. But we doubled up on that and thought
let's try and target the bottom right quadrant, which is basically people
working in the informal sector and don't have full property rights.

This was really challenging, I think in the first two years of our
projects, we didn't disburse anything, we met a lot of resistance from
our counterparts at the National Housing Bank. They said this isn't the
way bankers do things, this is too risky, it doesn't make sense, you're
creating a subprime problem. Eventually, we did a pilot with a small I will quickly jump through the slides. One of the reasons we did the
lender in Rajasthan State, and the pilot went really well. They disbursed project again was leverage, not just in terms of leveraging the capital markets
all of their money very quickly, and they came back for more. Other which is needed, but also trying to leverage the private sector. I think the
lenders came on board, once we got the ball rolling. I think there was an aim of the whole project was to open up a new market, create a new market
understanding from the National Housing Bank that this actually makes opportunity, encourage proper investment into cities rather than the
sense. They are government institutions; they have a social responsibility haphazard self-construction. If you find out so over the long term, you have
to provide housing for all. 100 million is a minuscule amount of money much better planned urban development. Better planned cities are more
in the scheme of things for India, but our whole amount disbursed efficient and they're more economically productive. The last leverage effect
within about 18 months from when it started and we basically completed is the employment and economic growth stimulus that housing can provide.
a project a year ahead of schedule. Investment into the housing sector creates multiplier effects, in terms of job
creation and economic impacts across all the related sectors.
We've been very conscious about the risks involved of lending to this
segment of the population, so we've been tracking the delinquency rates
very carefully. These are performing better than average. So, not only
are the banks making money on this, they're also finding they're getting

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