C ben

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 !

Growth addiction

The month of May saw major events at MHFC. Our first customer was one year old, and had successfully repaid 12 installments on time. Also for the first time ever we sanctioned 50 new customers in a month. We celebrated both events, and have set our sights on a target of 100 new customers for next month.
While we could easily get addicted to the growth, it is important not to lose sight of the commitment of our customers that ensures the quality of our portfolio and our ability to help many more....

DBS Housing Blog

link to blog by Bala, Director, DBS Affordable Housing - it has information on the launch of the project in Ahmedabad - which saw about 2000 visitors on opening day.

http://dbscommunities.blogspot.com/

New Project - Ahmedabad - DBS

We met with DBS Housing on Friday. This is a new company - formed by a team of professionals who are passionate about creating homes for lower income families. Their approach is bottom up - in that their plan for a township in Ahmedabad (near Vatva) is based on views from the community - and after a lot of research on needs of expected end users. In fact, they have a tie up with Saath (http://www.saath.org/saath/index.php) which works very closely with communities in Ahmedabad slums to provide integrated solutions in health, education, basic infrastructure, job training etc - and who will spread the word on this project. This is exciting for us as it will probably ensure that buyers on the project will be mostly end users from our target segment - lower income families from the informal sector.
The project opens on May 2 - about 1400 flats (1 RK, 1 BHK and 2 BHK) on offer - price range starting 3, 5, 7 lakhs in each category. It has been conditionally approved by MHFC - final approval will be after receipt of all planning permissions. Our LOs will be on site for the opening to take details of prospective buyers.
More details on DBS and the project on their website - link below:
http://www.dbsaffordablehomes.com/index_files/Page304.htm

Samruddhi - Poddar Developers - update

There has been a good response for the project in that 600 bookings already made - within a month of launch. However, of this, most bookings are for the 1 BHK category (which was priced at Rs 4.5 lakhs) and less for the 1 RK (priced at Rs 3.5 lakhs). In fact, the surplus bookings for the 1 BHK category have meant that (a) it will be closed quite soon as it seems that only Phase IV flats left in this category and (b) the builder has raised prices to between Rs 4.65 and 4.95 lakhs, depending on the floor. For the moment though, the 1 RK prices have been retained at Rs 3.5 lakhs and the builder has also set up a sample flat at site for viewing in order to generate interest (until now only the 1 BHK sample flat was ready). We still do not have a clear idea on the proportion of investors to end users but MHFC is certainly trying to spread the word among the latter segment so that they come forward to book a flat in what is probably a reasonably affordable project, even for those earning between Rs 8-10,000 Rs per month (the EMI on a Rs 2.8 lakh loan - after the 20% client own contribution of Rs 70,000 - will be approx Rs 3,700 over 15 years).