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THEME PAPER
regularisation legislation (Das, 2018). The Low Income incremental building even
allowing mortgage finance. Housing Finance project without formal tenure. DHAN
These include the MP Patta of the National Housing Foundation, which works in
Act 1984 (also applicable to Bank (NHB) supported by 31 urban areas across 6 states
CG), the Odisha Land Rights the World Bank was highly makes micro-finance and
to Slum Dwellers Act, 2017 targeted towards informal technical assistance available
and the Punjab Slum Dwellers and low-income households to members of women self
(Proprietary Rights) Act, 2020. and was delivered using a help groups (SHGs) for
market-based mechanism house improvement and
While the subsidy is through primary lending construction on the strength
significant (e.g., in Odisha, of “entitlements, not titles”.
Rs. 1.5 lakh from the central institutions (PLIs). Leveraging In Bangladesh, the Grameen
government and Rs.0.5 lakh the NHB’s apex role in the Bank’s housing loans are very
housing finance market, the
from the state government), popular and structured to suit
most households still require project also supported the the requirements of the poor
a loan to construct a house. development of necessary with low-interest small loans
Public sector banks and market infrastructure to with weekly repayments.
housing finance institutions enable private sector financial
(HFIs) shortlisted for the institutions to expand lending CONCLUSION
purpose by PMAY-U are to low-income households
usually not interested in against informal incomes The role of self-built,
lending to EWS households and informal property titles incrementally developed
for whom they cannot readily (World bank, 2019). housing cannot be
assess repayment capacity. Micro-finance institutions underestimated in making
Also, it may not be easy to (MFIs) and NGOs provide available affordable housing
repossess and sell these houses small loans for house and relieving housing
in case of default, so the loan construction or improvement. congestion in a country like
may not be a typical secured Apart from community India, with its huge housing
housing loan (Das, 2018). involvement, such loans also supply gap. It will continue
This calls for development of build in financial inclusion to dominate the housing
financial products specifically of women, who are the main market until other scalable
for incremental housing borrowers. For example, affordable housing supply
and harnessing of existing SEWA provides small loans options are made available,
non-conventional funding to women for incremental and complexities in housing
avenues to complement housing, differentiating delivery by the public
government assistance, or between secured and sector and formal private
even as a substitute for it. developers are ironed out.
unsecured loans. Secured The demand for the BLC
Studies show that there is a loans are backed by assets, component of PMAY-U has
huge demand for loans of such as jewellery or a lien on brought home this point
varying sizes and durations the client’s fixed deposits held and its implementation has
for incremental improvement at SEWA Bank. Unsecured flagged up issues which need
of housing. In recent years loans are backed by a lien on attention going forward.
a number of affordable the client’s demand deposits Inclusion is not only about
housing finance companies with the bank and guarantors. numbers but also quality,
(AHFC) have increased This makes it possible for for which key supply-side
their activity in this segment them to provide funding for interventions are needed
24 HUDCO-HSMI Publication
