Rural housing to constitute 60% of NHB's loan portfolio by 2009

New Delhi, Aug 24 (UNI) Focusing on rural housing and reduction of housing shortage by 30 per cent over the next three years, National Housing Bank (NHB), wholly-owned subsidiary of RBI will catalyse Rs 75,000 crore of institutional credit for housing.

In addition, the bank is also contributing to make the housing sector more transparent and consumer-friendly by embarking on the development of a residential property index at major cities in the country called as NHB RESIDEX. A pilot project, in this direction, was recently undertaken here.

''Housing finance will be in great demand as the sector is experiencing a phenomenal growth. Eyeing on the future demographics, we are also targeting at tier II and III cities as well as focussing on rural income generators which can become a signifiant scope of expansion,'' NHB CMD S Shridhar told reporters here today.

Our hypothesis would be market-based lending and would be in favour of segmenting the market, he added.

The regulator for Housing finance companies, NHB, has also come up with reverse mortgage for senior citizens which will help them leverage their homes to meet their financial needs while living at their place.

''We will provide loans in the form of periodic or lump-sum payments on a committed line of credit and will refinance the primary lenders and also guarantee their obligations to the senior citizens,'' Mr Sridhar said.

'Mortgage credit guarantee' is expected to be launched in a couple of months after RBI's clearance. It has received an excellent response from senior citizens. This would help expand the housing finance market through risk transfer through which ready-to-serve products would be given to them.

Bank's loans portfolio, currently standing at Rs 16,000 crore, may double in the coming three years, Mr Shridhar said adding that they will be financing directly to the Micro Finance Institutions for the rehabilitation of slums. Also, the bank has financed directly to various self-help groups in this direction.

Meanwhile, NHB today registered a 98 per cent increase in its net profit at Rs 87 crore for the fiscal 2005-06. Total sanctions during this period stood at Rs 9,076 crore while the disbursement touched Rs 5,997 crore, out of which 44 per cent was for the rural housing.

Bank is working for composite loans to rural families through Productive Housing in Rural Areas (PHIRA) which can serve as a production platform for women to generate additional income for the household.

NHB is seeking to forge partnerships with banks, housing finance corporation, regional rural banks, micro finance institutions, co-op institutions as well as with World Bank, IFC, ADB to widen the housing finance market, Mr Shridhar said.

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