National Workshop on Pro-poor Housing Finance October 29-30, 2009, New Delhi Presented by LIC Housing Finance Limited

Background In urban areas, 61.82 million people or roughly one in four persons live in slums (source: Census, 2001) Housing shortage estimated at the end of 10th Five Year Plan is estimated at 24.7 million covering 67.4 million households Over 90% of the shortage is in the EWS & LIG segment National Urban Housing/Habitat Policy 2007 sets up national goal for “housing for all”

Government’s initiatives Several government sponsored schemes in place such as: Indira Awas Yojana National Slum Development Program Rajiv Awas Yojana Two Million Housing Program In addition, The Government recently announced an Interest Subsidy Scheme for low cost housing

Issues in Pro-poor Housing Supply side constraints: Inadequate supply of dwelling units under EWS/LIG schemes of the Government. Virtually no supply from private developers. Affordability gap:- there is a significant gap between repayment capacity vis-à-vis the price of the dwelling unit. Limited access of the poor to institutional funding. Apprehension of loans becoming delinquent have made institutions wary of approaching this segment.

The Way forward Greater Supply of dwelling units, preferably through PPP model where Government allots land to private developers who undertakes the construction & the units are allotted to the poor. Developers maintain profits by commercially developing additional/increased FSI. Greater emphasis on Slum Rehabilitation. Mortgage Credit guarantee to be introduced to safeguard interests of the lenders. Interest Subsidy schemes to be made more liberal & more accessible to the poor. Tax Exemption on income generated through lending activities in low-end segments.

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