The Indian government is working with the World Bank and the International Finance Corporation (IFC) to develop an appraisal mechanism for borrowers in the informal sector for disbursements under the mortgage risk guarantee fund (MRGF) for home loans. The idea is to rate earners without fixed monthly salaries and, are hence, considered un-reliable borrowers by the lending institutions.
Low income households..!
The MRGF set up under the Rajiv Awas Yojana to enable the flow of credit from banks and home loan finance companies to the economically weaker sections and low income households.
The creation of the fund, run by the National Housing Bank (NHB), was announced in this year's (2011-12) finance minister Pranab Mukherjee.
According to Mr. R.V. Verma, CMD (Chairman and Managing Director), NHB, ''The informal sector is increasing and the demand for housing with it. This segment has the earning and repayment capacity but because they do not have fixed monthly salaries, they are not considered as stable borrowers . We are working with the World Bank and IFC on a technique to develop the appraisal profile for these segments so that lenders are comfortable to lend to this segment"
One the World Bank spokesperson conform the development.
Rs. 5 lakh home loan..!
The fund will have a corpus of Rs.1,000 crore contributed by both the central government and NHB. Once the appraisal system is in place, disbursals under the fund will start. The fund will guarantee loans up to Rs. 5 lakh.
Without salary slips, lenders will have to look into the earlier history of the borrower, his job patterns and the income flow.
Workers in the unorganized sector are estimated to constitute more than 90% of the total workforce.
Low income households..!
The MRGF set up under the Rajiv Awas Yojana to enable the flow of credit from banks and home loan finance companies to the economically weaker sections and low income households.
The creation of the fund, run by the National Housing Bank (NHB), was announced in this year's (2011-12) finance minister Pranab Mukherjee.
According to Mr. R.V. Verma, CMD (Chairman and Managing Director), NHB, ''The informal sector is increasing and the demand for housing with it. This segment has the earning and repayment capacity but because they do not have fixed monthly salaries, they are not considered as stable borrowers . We are working with the World Bank and IFC on a technique to develop the appraisal profile for these segments so that lenders are comfortable to lend to this segment"
One the World Bank spokesperson conform the development.
Rs. 5 lakh home loan..!
Without salary slips, lenders will have to look into the earlier history of the borrower, his job patterns and the income flow.
Workers in the unorganized sector are estimated to constitute more than 90% of the total workforce.
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