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Housing Finance: On The Fast Track

Housing for All ‘Vision 2022’ is a growth accelerator programme announced by the government under the Pradhan Mantri Awas Yojana in June 2015 that aims to provide affordable housing to people living under Economically Weaker Sections and Low Income Group categories in urban establishments of the country

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The Indian housing finance industry is seeing exciting times. The government has been taking several significant, growth-oriented steps to build wide reaching, impactful policy frameworks towards greater financial inclusion and in the process, paving the way forward for the housing finance industry. Housing for All ‘Vision 2022’ is a growth accelerator programme announced by the government under the Pradhan Mantri Awas Yojana in June 2015 that aims to provide affordable housing to people living under Economically Weaker Sections and Low Income Group categories in urban establishments of the country.

The programme was introduced to construct more than two crore houses across 305 cities and in nine States within a span of seven years until 2022, with financial assistance of Rs 2 lakh crore from the Central government. The scheme is a landmark initiative for a nation facing the imminent imperative of urbanisation and a country of tremendous unrealised potential. India needs growth, physical infrastructure and jobs — all of which can be delivered by the real estate and construction sectors. The government’s vision and subsequent schemes have opened up huge opportunities for housing finance companies.

Several key strategic initiatives, including the Real Estate Act, Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and the Smart Cities Mission are other complementary objectives of the Housing For All vision. Make in India and Skill India are well-timed and purposeful interventions to create a skilled workforce for strong, sustainable and balanced growth. Policy initiatives undertaken to boost the SME and infrastructure sectors are set to add greater thrust and open up broader opportunities for housing finance companies. These are powerful catalysts to meet the objectives of Housing For All by 2022 that are already providing a steady fillip to housing finance companies and broad basing their outreach. Mammoth projects worth over Rs 4 lakh crore towards developing smart cities, towns and providing housing for all over the next seven years are already underway and notable progress has been made in Gujarat, Karnataka, Rajasthan, Maharashtra, West Bengal and Tamil Nadu. Evidently, much ground work is already in advancement indicating that set targets are being committedly implemented.

The Housing for All programme in effect, is a game changer and a resource unifying platform that has been receiving very encouraging and reassuring participation from policy makers, customers and other industry participants. With large players like banks and specialised housing finance institutions focused on the formal, higher income segment, a huge market therefore, remains under-explored and holds tremendous potential for housing finance companies that have developed a committed and sustainable business model in extending credit to those at the bottom of the pyramid. Housing finance companies now have sufficient bandwidth to expand customer outreach and align their growth strategies in a way that will steer the industry collectively to achieve the government’s Housing For All vision.

Mortgage companies will have to emerge as a comprehensive financial solutions provider to serve the needs of the low and middle income segments. Innovative, tailored products and services will serve unmet needs and drive financial inclusion, thus transforming lives. The future is also steadily being influenced by new technologies to reach a larger set of customers. Embracing interactive technologies (Mobile Apps, Social media, geo-localisation software) will not only help in market segmentation but also in creating greater awareness, financial literacy and serving customers with products specific to their financial needs.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Harshil Mehta

The author is CEO, DHFL

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