1. Micro Housing Finance Corporation
“Its not that people aren’t credit worthy, it’s banks that aren’t people worthy.”
Muhammad Yunus
Micro Housing Finance Corporation
IQPC Affordable Housing Development Summit
New Delhi | Nov 29, 2010

2. Contents Contents The MHFC Story Our Customers Our Product
Badri Thakur
Neetu Chauhan
Our Product
Our Projects
About MHFC
Vision & Philosophy
Current Status
Our Team
Our Challenges
Customer Challenges
Builder Challenges
Policy and Regulatory Challenges
Contact Us
Jeejamata Nagar, Lower Parel, Mumbai

3. The MHFC Story The Urban Context
30% of India’s population is urban, living on less than 2% of the country’s land
In Mumbai, 54% of the city’s population lives in slums in less than 4% of its land
India’s urban population (285 million) has increased five fold over the past 50 years, and is projected to keep increasing to reach 50% of the total population in the next 30 years
Bharatnagar Slum, Worli, Mumbai

4. The MHFC Story The Market The Social Need
LIG housing shortfall: 25 mn units
LIG housing market size: Rs tr
Mortgage finance market size: Rs. 4-8 tr
The Social Need
90 % of workforce employed in informal sector
Monthly earnings: Rs. 5,000 to 30,000
Excluded from mainstream housing finance
MHFC seeks to bridge this gap
A typical G+1 structure in Bharatnagar slum

5. Our Customers Average MHI: Rs. 8,000 to 20,000
Primarily employed in the informal sector
Average HH Size: 5
Households with multiple earning members
Currently living in rental housing in informal settlements
Aspiration to own their own homes
Vegetable Vendor, Byculla Market, Mumbai Average MHI: Rs. 16,000

6. Customer Stories Badri Thakur Neetu Chauhan Age: 37 yrs Age: 25 yrs
Profession: Salon Owner
Neetu Chauhan
Age: 25 yrs
Profession: Housemaid

7. Customer : Badri Thakur
Moved to Mumbai from Darbhanga District, Bihar as a teenager
Worked various odd jobs for several years
Accumulated enough capital 7 years ago to start his own business – Popular Hair Cutting Saloon in Cheera Bazaar, Mumbai
Badri Thakur with a client at Popular Hair Cuttng Saloon, Cheera Bazaar, Mumbai

8. Badri Thakur
Offers various services (hair cuts, shaves, etc.) priced between Rs. 30 to Rs. 150.
Monthly net income from Popular: Rs. 11,000
Has opened 2 additional salons following Popular’s success in Dhobi Talao and Fanaswadi, Mumbai
Currently employs 14 workers and earns Rs. 30,000 (net) from all 3 salons per month
Hari Om Cutting Saloon, Fanaswadi, Mumbai

9. Badri Thakur
Previously lived in a 150 sq ft room adjoining Popular with his wife, brother and 2 children.
Transitioned to a rental flat in Bhayendar, with the dream of eventually owning his own home.
Accumulated savings to put down an initial deposit for a flat.
Identified a home at an affordable price in Rashmi Star City, Naigaon (E).
Badri Thakur’s previous residence adjoining Popular Hair Saloon

10. Badri Thakur
Required a mortgage to finance the purchase of his flat at Rashmi Star City.
Ineligible for housing finance from mainstream banks, referred to MHFC for a micro-mortgage by the builder.
Sanctioned a loan by MHFC for Rs. 5.2 lakhs for 15 years
Now a proud home owner, scheduled to move into his new apartment in December 2011.
Badri’s children, Kiran (age 10) and Karan (age 7)

11. Customer : Neetu Chauhan
Previously lived in a rented room with her family of 8 in Bharatnagar Slum, Worli, Mumbai.
Earns a salary of Rs. 6,000 per month working as a housemaid in Altamount Road.
Combined household income including her father and brothers’ incomes: Rs. 25,000 per month.
Neetu Chauhan with her mother in their new 1 BHK flat in Vaishnavi Sai Complex

12. Neetu Chauhan
Previously paid Rs. 3,000 as rent for a single room in Bharatnagar with little/no access to basic services (electricity, water supply, sanitation).
Started building household savings towards putting down an initial down-payment for purchasing their own home.
Identified a flat in affordable housing project Vaishnavi Sai Complex, Virar (E).
The lane outside Neetu’s house in Bharatnagar Slum, Worli

13. Neetu Chauhan
Approached MHFC for a home loan of Rs. 5 lakhs for 6 years to finance the purchase of her home.
Can comfortably service her EMI of Rs. 10,619 given monthly household savings of Rs. 12,000
Has recently moved into Vaishnavi Sai Complex with her family to live in their newly purchased home.
Neetu and her family in their new flat in Vaishnavi Sai Complex, Virar (E)

14. Our Product Loan Size: Up to Rs. 10,00,000 Loan to Value Ratio: 80%
Loan Term: up to 15 years
Interest Rate: 12% to 14% (reducing)
Security: mortgage of the house being financed
Covenants: bank account / ECS
Project under construction, Vatwa, Ahmedabad

15. Our Projects Rewari, Haryana Ahmedabad, Gujarat Meerut, Uttar Pradesh
Om Shanti Nagar 2 & Shaan III, Santosh Associates
Navjivan, Atmiya Developers (Foliage)
Gokul Galaxy & Radhe Galaxy, Galaxy Group
Umang Lambha, DBS Affordable Home Strategy Ltd
Karnavati Apartments, Shree Ram Developers
Paradise Park, Shraddha Developers
Swapna Sakar Residency, Vintron Infrastructure
Surat, Gujarat
Sri Tirupathi Balaji Township, Weal Developers
Surcon Residency, Shah & Sanghavi
Mumbai, Maharashtra
Neptune Swarajya, Neptune Group - Ambivali
Samruddhi Complex, Poddar Developers - Karjat
Star City & Rashmi Complex. Rashmi Developers - Virar
Shubh Griha, Tata Housing - Boisar, Vasind
Ashtavinayak Habitat, Karjat Land Developers - Karjat
Sathyanagar, Conglome Technoconstructions - Boisar
Vaishnavi Sai Complex, Vaishnavi Constructions - Virar
Sanskruti Apartments, Vaishnavi Deep Constructions - Virar
Valram Vatika & Ashish, Valram Constructions - Titwala
Liberty Horizons & Ten Square, RCL Developers - Karjat
Pune, Maharashtra
Anandgram, Vastushodh Projects Pvt Ltd
Dreams Nivara, Dreams Group
Bengaluru, Karnataka
Vaibhava, Value Budget Housing Corporation
Kolkata, West Bengal
Sugam Swayam, Sugam Homes
Amrita Abhasan, BGA Realtors
Meerut, Uttar Pradesh
Spice Homes
Rewari, Haryana
Ashray Homes, Surefin Real Estate Developers
Hyderabad, Andhra Pradesh
Shubh Gruha, Maruthi Corporation

16. About MHFC Vision Philosophy
To provide micro mortgage solutions for the urban poor
Philosophy
Market Driven Solutions to address social issues
Inclusive Approaches to Lending
Sustainable and Scalable
Deploy best in class technologies
Drums storing water in Nehru Nagar slum, Juhu

17. Current Status NHB COR received in February 2009
Capital commitment: 33 crores
Commenced operations in June 2009
Total Applications Received: 502
Total Loans Sanctioned: 403
Total Amount Sanctioned: Rs crores
Average Loan Size: Rs lakhs
Number of Approved Projects: 25
NB: All figures are as on
Shukobristhi, Kolkata
1 Rs. 3.9 lakhs - 2 Rs. 6.2 lakhs
* All prices are approximate and subject to change

18. Our Team
Brings together experience from the investment banking, real estate development and retail, mortgage and IT industries
Has fresh perspective on LIG housing sector
Intends to marry the best practices of housing finance and micro finance
Driven by a strong commitment to social change
MHFC Team, March 2010

19. Our Challenges Customer Challenges Builder Challenges
Policy Challenges
Regulatory Challenges
Shapoorji-Pallonji “Shukho Brishti” project construction site, Kolkata
1 Rs. 3.9 lakhs - 2 Rs. 6.2 lakhs
* All prices are approximate and subject to change

20. Customer Challenges Awareness Self Exclusion Outreach Cost Escalation
Lack of awareness on affordable housing options and formal housing finance
Self Exclusion
Ineligibility  self exclusion from seeking housing options
Outreach
Focused outreach towards individuals living and working in informal communities and currently excluded from mainstream housing finance
Cost Escalation
Appreciation of flat prices faster than increases in customer incomes
Rahul Singh, MHFC Customer, Boisar Average MHI: Rs. 11,000

21. Builder Challenges Lower Construction Costs
Functional construction design
Cost-effective construction materials
Improved use of technology
Reduce construction period
Approach to LIG Housing Construction
Project and Assembly-line approach to construction
Land as working capital vs. land as appreciating asset
Access to project finance to create ready-for-sale units
Vaishnavi Sai Complex, Virar (E), Mumbai
1 Rs. 5.8 to 6.2 lakhs Rs. 7.9 to 9.3 lakhs
* All prices are approximate and subject to change

22. Policy Challenges Rationalize tax incidence on the LIG housing sector
Innovate credit enhancement for the informal sector
Reduce project implementation schedules
BYS Security Guard, Cooperage, Mumbai Average MHI: Rs. 11,000

23. Regulatory Challenges
Develop Long Term Debt Markets
Reduce asset liability mismatches
Improve access to off-shore markets
Priority Sector Definition
Special Status for Loans <Rs. 10 lakhs
Automatic SARFAESI eligibility
Eligibility for SARFAESI upon receipt of COR from the NHB
Hall in 1 BHK model flat, Dreams Nivara, Pune
1 Rs. 4.6 lakhs Rs. 3.5 lakhs Rs to 6.75 lakhs
* all prices are approximate and subject to change

24. Contact Micro Housing Finance Corporation
# 3 Victoria Building, 1st Floor
SA Brelvi Marg, Off Horniman Circle
Fort, Mumbai
Tel: (022) or 0427
Website:
Onion-Potato vendor, Colaba market, Mumbai Average MHI: Rs. 20,000