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Access to Housing Finance by the Poor and Study of Microfinance for Housing (MFH) in India
International Journal of Business and Economics Research
Volume 4, Issue 6, December 2015, Pages: 270-280
Received: Oct. 1, 2015; Accepted: Oct. 16, 2015; Published: Oct. 28, 2015
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Author
Basanta K Sahu, Dept. of Economics, Indian Institute of Foreign Trade, New Delhi, India
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Abstract
Access to housing finance is a major challenge for the poor and low income groups because of underdeveloped housing finance market, high transaction cost, lack of collateral, type of housing credit and other factors specific to local area. The paper analyzes nature and pattern of microfinance for housing (MFH) in India and its impact on low segment housing finance. Using primary data collected from microcredit clients from different regions in two southern states in India (Kerala and Karnataka) it discusses two different MFH schemes to understand low segment housing finance and its impact on rural housing activities. Our data support to estimate the approximate size of the low segment housing credit market and the existing gap between demand for and supply of such credit. Findings of the paper offer better understanding about functioning of low segment housing finance markets and potential to improve housing condition of the poor through developing such markets including MFH. Major constraints of MFH program in India are inadequate fund, poor product design, low scale of operation scale and policy related issue. Inter-links between microcredit and MFH is evident from our data. Average demand for housing credit was estimated three times higher than its supply and mostly for new construction of houses rather to repair and renovate existing houses. Though MFH found inadequate to meet the demand for housing credit but it works as kick starts for housing activities and influences household decision making in terms of start of housing activities, fund arrangement and utilization, allocation of resources, asset creation etc. which are crucial for the poor. Housing activities in our study not found progressive as argued by earlier study [1].
Keywords
Access to Housing Finance, Microfinance for Housing (MFH), India
To cite this article
Basanta K Sahu, Access to Housing Finance by the Poor and Study of Microfinance for Housing (MFH) in India, International Journal of Business and Economics Research. Vol. 4, No. 6, 2015, pp. 270-280. doi: 10.11648/j.ijber.20150406.12
Copyright
Copyright © 2015 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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