New Delhi: Minister of Housing and Urban Poverty Alleviation Kumari Selja today said time was appropriate for the banking sector and other financial insitutions to play a greater role, along with the government, to provide affordable housing to the poor.
Delivering the keynote address here at an international seminar on "Growth and stability in Affordable Housing Markets", Selja said there has been a steady growth in the housing finance companies in India who are serving as dedicated outlets for the housing credit delivery.
"With the commitment of the government towards the financial, social and economic upliftment and inclusion of the social and economically backward section, it is an appropriate time for the banking sector to come forward in a big way to cater to their housing requirements by devising suitable appraisal and processing models," she said.
Pointing out that there was a lot to learn from countries of Asia-Pacific region, the minister said a solution lies neither wholly with the government nor with the market.
She specifically mentioned the policies adopted by Thailand and Phillipines.
"Therefore, there is need for partnership amongst all stakeholders- governments at the central, state and city level, private sector construction agencies, banks and financial institutions and non-governmental organisations representing the large section of the informal market," Selja said.
Selja said government of India has extended a range of monetary and fiscal incentives to promote lending and investment in affordable housing. These include income tax benefits for borrowers, lenders, investors, savers and construction agencies.
She lauded state governments who have come out with supportive housing policies, lower transaction cost and incentives to the developers.
"We also need to pay attention to the development of the debt market for housing, encouragement of public-private partnerships, rental housing finance and promotion of community-led housing finance and housing construction initiatives," she said.
India faces an estimated housing deficit of about 26 million, predominantly in low-income segments.
"This is an overwhelming number in itself. The proliferation of slums and informal settlements further add to the challenge. The role of the banks and the specialised mortgage lenders in various countries and their experience in addressing these problems could provide useful lessons for policy makers in both financial markets as well as the housing sector," the minister said.
Selja maintained the growth and expansion in retail housing loan market has been uneven and large segments of the population continue to be outside the formal financial system.
"There is a definite need at this point in time to reorient our approach and develop programmes for reaching out to these segments. There must be a range of products to serve the needs of the different segments of the market," she said.
The financial institutions should adopt a more flexible approach and a more positive orientation in serving the housing needs of low-income segments.
"We should also explore solutions outside the fiscal support framework which we all collectively must strive to search and explore," Selja said.
