India’s housing sector, as reflected in the quality and quantity of its housing loan segment, has transformed itself substantially over the past quarter century, the last 13 years of the period having registered vaulting growth, says a report by the National Housing Bank.
Though the housing loan segment is marked by banks and financial institutions offering “plain-vanilla amortisation home loans with relatively short maturities,” “there has been a veritable revolution in housing finance in India,” said the report pointing out that the size of the housing loan segment leapt 1,605 per cent from 2000 to 2013.
Outstanding housing loans in the country stood at Rs. 43,850 crore in March 2000, with housing finance companies accounting for Rs. 25,326 crore and scheduled commercial banks Rs. 18,524 crore. However, the figures jumped to a total of Rs. 7,47,911 crore by the end of March 2013, with the finance companies accounting for Rs. 2,85,711 crore and the banks for Rs. 4,62,200 crore.
The report said that more than 80 per cent of the economically weaker and low-income group had no access to institutional finance largely because of a lack of clear title deeds and employment of the members of these groups in the informal sector.
Poor accessPoor access to institutional finance for the economically weaker sections contrasts with the rapid growth in the number of housing finance institutions in the country to the current level of 57 from their negligible numbers in the 1990s, the report said.
Quality of loansThe quality of home loans in India, with its low level of non-performing assets (NPAs), is a “distinguishing” feature, the report said.
The gross NPA level for housing finance companies is less than one per cent. It is less than two per cent for commercial banks. Among the housing loan NPAs for commercial banks, higher levels are observed in small-size loans. This could be attributed to the low level and irregular income, the report said.
