Vastu Housing Finance, Affordable Housing Finance For Home Buyers
Affordable Housing Finance may soon be a dream come true for potential home buyers but for that to happen, we need to move away from traditional forms of lending and adapt to the technological way of life.
Shortage in affordable housing continues to be a major concern for India. Currently, this shortage is over 20 million. India’s urban population is growing at an average of 2.1 per cent every year since 2015 and is likely to reach 60 crore by 2031 (up from 37.7 crore today). But the growth in the housing sector has been unable to keep pace. The economically weaker sections and the lower-income groups comprise the informal sector and account for 96 per cent of the urban shortage.
Lack of access to finance is one of the key deterrents of growth for the affordable housing sector. Under the Government’s Pradhan Mantri Awas Yojana, the National Housing Bank has been pro-actively working with housing finance companies to deploy an interest subvention subsidy for low-income groups.
Affordable housing finance targets first-time home buyers — many of whom have informal income and poor documentation which is why, when a traditional bank or financial institution is lending to this segment, the approach has to be different than that of, for example, a middle-income group salaried individual working at a mid-sized/large corporation.
If a person is self-employed and is without comprehensive documented income or adequate credit history, getting home loan can be a huge challenge in our country. This because traditional lenders in the current eco-system find it difficult to ‘fit’ the case into their income assessment methods. Consequently, potential home buyers end up borrowing from informal lenders or sometimes abandon their dream of owning a home, despite their ability to service the loan.
Since their approach at Vastu is customer-focused and technology-enabled, they do not collect any physical documentation from the customer till the time of loan disbursement. All required information for underwriting is captured in real-time, through state-of-the-art mobile solution that promotes efficiency and transparency in the loan underwriting process.
They get to know the customer beyond what his/her papers have to say. They understand their work, cash flows, get to know their family and move beyond being just a financier to a partner helping them secure their dream of owning their first home. This is largely possible because of their focus on using technology and they want to become a trendsetter in new-age finance space.
Source Link- http://www.dailypioneer.com/columnists/oped/focus-on-indias-informal-housing-sector.html