Saturday, June 12, 2010
Last week we held a credit camp for the Saath customers of the DBS "Umang" project in Ahmedabad (almost 50% or about 150 bookings have been reserved for Saath customers who are typically from the LIG informal sector). It was inspiring for us to meet and listen to their stories - in terms of how they have struggled to make a living despite very difficult conditions, and now that they feel fairly settled monetarily, they would like to take the next step in buying a permanent home. The customers we met ranged from a family of tailors, to vegetable vendors, to maalis and waiters. But 1 couple stood out. The husband was fairly quiet, and the one who did all the talking was the wife - "C" ben. She worked at an NGO - for over 15 years - earning about Rs 5000 per month. She also gave tuitions to slum children for 2 hours every day at a programme organised by IIM Ahmedabad - earning another Rs 2000 per month. Her husband was a driver - working for about 16 years for 1 employer - and was earning about Rs 6000 per month. Total family income was about 13,000. They had made a booking for the bigger 2 RK flat (which cost about Rs 6 lakhs) and sought a loan from MHFC of about Rs 5.5 lakhs. While in any case this was not a possible loan from MHFC as we require a 20% client margin (1.2 lakhs), in any case the EMI (approx 7,000) would be unaffordable for the family from our point of view. We advised that we could not support her request, but would happily support if they bought the smaller 1 RK flat (which cost about Rs 3.5 lakhs). Initially, they were not very pleased and we had a long discussion on the affordability. But eventually she also realised that buying the larger flat would place a huge financial pressure on the family. Finally, she agreed to switch to the smaller flat and take a smaller loan of approx Rs 3 lakhs and pay an EMI of approx Rs 4,000 - but not without trying to negotiate for everything - the down payment required, the loan tenor, the pricing !