MHFC on other Social Media

Just to notify - MHFC is also on Facebook, Twitter and Instagram.

While we bring in a lot of information on our work in the affordable housing space as well as news and updates from the industry on the blog here, the Facebook, Twitter and Instagram feeds gives a closer look at our work. There are regular updates from MHFC on the latest happenings as well as our work, news from the industry that interests us and the highlight - interesting customer stories.

Blog readers keen to read up more about our work; especially the impact created in the lives of the financially excluded, do go ahead and 'Like', 'Follow' and 'Share' our feeds on Facebook, Twitter and Instagram! We would love to connect with you there! 

RBI guidelines on Priority Sector Lending ("PSL")

major changes in yesterday's RBI notification re revised PSL guidelines - esp for Housing Finance Companies like MHFC - see below links for more information:

Business Standard news article
Hindu news article

and the detailed RBI notification itself

but in summary, all bank loans to housing finance companies ("HFCs") — approved by the NHB for their refinance — for on-lending for the purpose of purchase, construction and reconstruction of individual dwelling units subject to an aggregate loan limit of Rs.10 lakh per borrower, would come under priority sector lending.

we hope that this does have a big impact on lending by HFCs to weaker sections - for info, all loans granted by banks to MHFC for onlending will qualify for PSL lending - with sole focus on lower income (and typicaly informal sector) families, MHFC's cap on loan amount is in any case 10 lakhs (in fact average loan today is much lower at about 4.3 lakhs).  

Budget 2012 - proposals related to low income housing / finance

Summary of Budget 2012 proposals which affect low income housing (developers / financing) :

• ECB (overseas borrowings) permitted for low cost affordable housing projects;
• Setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans;
• Enhance provisions under Rural Housing Fund from Rs 3000 crore to Rs 4000 crore;
• Extension of Interest Subvention Scheme of 1% on housing loan up to Rs 15 lakh for another year; and
• Enhancement of the limit of indirect finance under priority sector from Rs 5 lakh to Rs 10 lakh.

The ECB proposal is new and will positively impact developers who might enter this market since cheaper financing options will be made available - though we need to see the details of what constitutes low income housing when the RBI notification is issued.

RHF increase will help MHFC as will the raising of the indirect finance limit - as all our loans are less than 10 lakhs and generally to weaker sections (same objective as the RHF).