Mumbai Marathon - MHFC running for MMC

On Jan 17th, the entire MHFC team will be running in the Mumbai Marathon (despite the fact that some of us shouldn't even be jogging) - all for a good cause - to raise money for Mumbai Mobile Creches - an NGO which looks after children on construction sites (for more info, please see http://www.mumbaimobilecreches.org/)
No pressure at all - as we know that many of you already support other organisations - but it would be great if you could help make a difference to MMC's work and add a contribution to the funds we are collecting by writing a cheque in favour of "Mumbai Mobile Creches" and mail to us at:
Micro Housing Finance Corporation
#3 Victoria Building, 1st Floor
S A Brelvi Road
off Horniman Circle, Fort
Mumbai - 400001
For those of you who are tax conscious, there is good news. You will get an 80 G tax exemption on your contribution. When else will you get an opportunity to make us run and also let the Indian Government pay for the privilege ?

New project approved in Virar (East)

MHFC has just approved a project in Virar (East) – Sanskruti Apartments. This is by the same builder of an earlier approved project – Vaishnavi Sai Complex – also in Virar (East) – where all 328 flats were sold out. This new project is small - 67 flats of which about 30 are in the smaller 1 RK (approx 350 to 400 sq ft size) category and thus less expensive (starting at about Rs 6.2 lakhs all inclusive). Booking opened Jan 1 - and MHFC has negotiated for its clients a special rate (Rs 50/sq ft less than the public rate - or approx Rs 20,000 savings) for a month. We are in discussions with vendor associations, NGOs and MFIs, who deal with the informal sector, and expect to help place the flats by the end of Jan.

For detailed information, see http://www.mhfcindia.com/approved-project.html OR please call our rep at the site, Savio d'Souza on 9821730702.

Note: MHFC is NOT a builder, and is not responsible for the quality and title of properties even if approved by MHFC for customer financing – buyers need to make independent verifications. We also do not receive any commissions from the builder. Our interest in spreading the word is solely to bridge the information gap – to make those in the informal sector aware of projects aimed at the LIG segment, and further, to make them aware of financing available.

Neetu moves into her new home

One of our first clients, Neetu, recently moved into her new home in Virar. She is certainly our typical customer - a housemaid, who lived in a central Mumbai slum in very poor conditions (small room, poor sanitation, common toilet, no open space, etc) with her husband (a driver), her mother, 3 brothers and a younger sister. She has been wanting to buy her own home (one with clear title and reasonable quality) for some time now and with her husband, could put down the 20% margin on a home purchase from a private developer. The issue was to find a bank to finance the remaining 80%. When we met her, she said she harboured little hope in getting a loan as she had been turned down several times for much smaller loans in the past - because of a lack of documentary support to prove her income. At MHFC, we were convinced not just about her ability to repay the loan (by verifying her income with her employer) but also her willingness (the loan tenor is set at just 5 years evidencing her strong desire to be debt free as early as possible).

Attached are a couple of pictures - one of her old home and one of the new building. Its still a squeeze for 7 adults to be living in a 360 sq ft flat - but Neetu puts this in perspective when she says they used to live in a 150 sq ft room, and hence find the new home very comfortable.

Panel Discussion - Informal Cities

I went to a discussion on Nov 7 organised under the Informal Cities Exhibition which was titled "Focus on Redevelopment in Dharavi" which had (a) presentations by Anirudh Paul (an Architect looking at an alternative way of redeveloping Dharavi) and David Satterthwaite (International Institute for Environment and Development) and then (b) a panel discussion with Gautam Chatterjee (CEO, MHADA) and Kalpana Sharma (the journalist who has written a book on Dharavi). The discussion was moderated by Sheela Patel, founder of SPARC.

The discussion was very interesting on a couple of counts - firstly to get an indepth understanding of the various forces at work in Dharavi (typography of the population, the inner street layouts, of course the new plan and the alternatives) but secondly, to also hear David's view that "slums are the solution and not the problem" ! If I understood him correctly, he was making at least two points - first being that migrations are always going to continue and the slums were the only practical low cost residential option for this influx which was responsible for keeping costs low for the whole city (in terms of supplying services) - second point was that around the world, it was getting to be an accepted fact that slum demolitions did not work and instead the focus was on slum upgradation - in terms of helping with sanitation / water / electricity / home improvement etc. He said that with state support. the slums he saw 20 years ago in various countries (Colombia, Brazil, Peru, Thailand, etc) had actually improved to a point where he would happily live there.

It was highly interactive in that the audience questions took up another hour and Sheela had to finally force close the discussion at 6.30 (after 2 and a half hours).

Interview with David Satterthwaite

Technology Trends in the Financial Inclusion Market

MHFC recently visited a technology conference in Hyderabad that showcased existing and emerging technology in the financial inclusion sector. The conference was attended by leading technology players such as IBM and Infrasoft technologies that have designed robust IT systems to support the Micro Finance Industry. They all seem to have leveraged their in house core banking technologies (which they have developed for regular banks) and have adapted them for the micro finance market.

The adaption process is truly fascinating. Most technology companies have started providing their CBD solutions to their clients in a Saas( Software as a service) model. This greatly reduces the sunk costs incurred by a budding MFI while allowing it to leverage all the essential core banking functionality it needs to operate.The Saas approach is single handedly the most beneficial service the tech companies are providing to MFI.

While the Saas model mainly deals with the back end processes, the implementation of technology at the frond end of the MFI operation is remarkable. In this case we were really impressed by the work FINO has done in this arena. They have designed and implemented mobile banking systems using the ubiquitous bluetooth enabled mobile phone (costing less than 80$) and integrated front end processes such as collections, disbursements, and loan management that were earlier completely detached and required manual data entry in order for them to be synced up with the core banking systems.

All in all it was a great conference, where I got to learn a lot about the processes and system being used by leading MFI today. Now we have the hard task to decide how best to leverage these wide array of technologies in order to meet challanges that MHFC will face in the coming years.