A-rural housing scenario B- Sarva UP rural finance initiatives Y P Issar

A. RURAL HOUSING SCENARIO 1. RURAL POPULATION 1. RURAL HOUSEHOLDS 1. RURAL HOUSES 2supgb

2.Rural Households Rural households were 9cr, 11 cr and 14 cr in 1981, 1991 and 2001 respectively 3supgb

Rural Population Indian Population Year cr Year cr Urban Rural 28% 72% 38% 62% Age Group(20-45 yr)36.6%40% Urban Population29 cr53 cr Rural Population74 cr86 cr Increase in Rural Areas--12 cr Rural Households14 cr Household Size5.50 4supgb

3. Rural houses……. Average area of a rural house 64 sqm 35% app. had over 50 sqm area -10% app. had over 100Sq.m area (In 1993, this percentage was 15%) About 32% were constructed more than 20 years ago. Land holding per capita in rural areas higher than urban areas- construct on their own land. 95.4% own their homes 5supgb

3. Rural houses……. Gap in desired and actual quality Houses classified as pucca, semi pucca, kutcha Share of pucca houses increased from 18.5% to 35.4% from 1971 to % live in one or two room houses %in one room houses For average household of 5.2 persons, house size is small. 6supgb

3. Rural houses…….. Structural condition of rural houses cr(45%)and 0.25cr(42.2%) of residential and nonresidential houses in good condition 6.28 cr(48.7%)and 0.32cr(53.3%) of residential and nonresidential houses classified as livable 0.81 cr(6.3%)and 0.03cr(4.5%) of residential and nonresidential houses in dilapidated condition 7supgb

3. Rural Houses……. Exclusive Amenities-2001 Access to safe drinking water- 80.5% ( 26.3% in 1981) Access to exclusive toilets- 26.3% Electricity connection-43% (14% in 1981) 8supgb

B. Sarva UP- rural finance initiatives Sarva UP Gramin bank-an introduction Capital plus reserves=Rs 142 cr Deposits=2630, advances=1500 cr Net profit(PAT) = Rs cr Deposit/advances accounts 22 lakh/3lakh respectively Gross/Net NPA 2.89%/0% respectively 295 branches/1200 persons/13 districts in UP CASA =83% second highest amongst all RRBs Cost of deposits: 4.16% 9supgb

Our rural housing finance portfolio Our cumulative disbursements= 1648 accounts Rs1882 lakhs Current year disbursements= 305 accounts Rs 515 lakhs Outstandings 1417 accounts Rs 1317 lakhs 10supgb

Schemes for financing rural houses GJRHFS FINANCING TO Kisan Credit Card (KCC) holders Other borrowers Most of the loans are linked with the holding of agriculture land 11supgb

Amount of Loan GJRHFS Construction of new dwelling units=up to Rs 5.00 lakh Most of loans given up to Rs 2.00 lakh Up gradation/major repairs= up to Rs 1.00 lakh No loans given under this KCC holders-Rs 2.00 lakh in addition to crop loan Few loans given under this Others= need based 12supgb

Loaning Powers Rural sites up to Rs 5.00 lakh by branch managers up to Rs lakh by higher authorities 13supgb

Rate of Interest(%) Period of loan :floating ratefixed rate Up to 5 years Up to 15 yr Max= % up to Rs 30 lakh 14supgb

Other charges Processing fee: 1% of loan amount for loans above Rs Issue of balance /interest certificate: Rs 50 per certificate 15supgb

Repayment GJRHFS Maximum 15 years Mostly for 10 years Others Max 25 years Moratorium period: Maximum 18 months 16supgb

Margin/Security Margin: Fifteen percent of cost of construction Security Primary: mortgage of the house /hypothecation of other assets or Collateral: Regd mortgage of agriculture land 17supgb

UP Agricultural Credit Act 1973 Construction/repair/extension of a house on abadi land in rural area for personal use shall be deemed as an agriculture purpose, for the purpose of this act 18supgb

Other aspects Reasonable growth Limited to few pockets So far low focus on this activity Lack of awareness amongst public Farmers using highly subsidized (5%) KCC funds for housing Not covering non farmers/salaried class/low income/disadvantaged groups Need product differentiation as per segments 19supgb

Other aspects …. Need to have specialized loan processing manpower High potential available in the command areas Average amount per loan to be enhanced Proposing housing finance hubs at Noida/Ghaziabad/Meerut/Jhansi Proposing score based model for sanctioning to reach scale 20supgb

A few suggestions Application of interest be allowed up to annual basis depending on the harvesting of crops in stead of monthly basis as recently allowed in gold loans. Asset classification norms for rural housing loans be allowed as applicable to Agriculture advances as the repayment is mostly based on proceeds of crops. 21supgb

A few suggestions…… Clean housing loans up to Rs be allowed for those having assured income eg salaried /self employed who have no other assets to mortgage. A Credit Guarantee Scheme for small housing loans can help to cover larger number of low income households census limit of population be shifted to 2001 census base with higher population level. 22supgb

A few suggestions……. GJRHS be given common publicity in vernacular press NHB refinance be allowed on portfolio basis removing loan wise clauses from Memorandum of Agreement especially for small loans up to Rs 10 lakhs 23supgb

A thought With 96 % home ownership, rural people are investing short term funds for housing sector. More rural housing finance can help have major impact on their life styles. 24supgb

Thank you 25supgb