The National Housing Bank (NHB) has initiated measures with banks and home finance companies to chalk out a new credit appraisal method to help small-ticket borrowers who need loans in the Rs 5 -Rs 15 lakh category. These borrowers will benefit from the new regime that aims to ease the strict norms that made loans difficult for those seeking affordable homes.
As part of the UPA's financial inclusion programme, the government is looking at setting up low cost housing for the low income group. The new credit appraisal mechanism would help banks and HFCs understand the repayment capacity of this segment seeking to buy properties. The move could provide the much-required stability to the real estate sector.
"This segment would contribute to the stability in the economy and beat the impact of the slowdown, it is crucial to have a credit appraisal system for this category," RV Verma, chairman and MD, NHB told Hindustan Times. This segment would also boost volume, Verma said. Growth in the demand for housing loan in the current fiscal has dipped, due to high interest rates coupled with high property prices and delay in completion of projects.
Banks and HFCs have also been careful in providing loans to home borrowers especially after the level of their non performing assets has risen.
NHB under its Residex project is planning to develop a skill set to appraise lenders who would require smaller loan sizes.