<p>"Housing finance companies (HFCs) and banks hesitate to serve the low-income market for a variety of reasons such as inability to assess credit worthiness, uncertain cash flows and lower profits," she said while addressing the national convention of the National Real Estate Development Council.<br /><br />Noting that involvement of banks and HFCs is essential to bridge the huge housing deficit, Selja said the ministry is planning to set up a guarantee fund for removing the fears of banks and HFCs in providing loans to the economically weaker sections (EWS) and the low income groups (LIG) of the society.<br /><br />"My ministry is in the process of innovating and recommending appropriate risk mitigating instruments to allay the fears of banks/HFCs in extending long term home loans to the poor," she said.<br /><br />Selja expected that with a hedge fund to cover risk in title instruments, more financial institutions would come forward and would foster the goal of inclusive growth of the downtrodden sections of the society.<br /><br />The minister pointed out that despite boom in housing finance, "affordable housing remains a distant dream for the Economically Weaker Sections (EWS) and the Low Income Groups (LIG) of our society".<br /><br />The total urban housing shortage including the backlog and additional requirement would be 26.53 million dwelling units by the end of the 11th Five Year Plan period.<br /><br />"Ninety-nine per cent of this shortfall would be for Economically Weaker Section (EWS) and the Low-Income Group (LIG) segment, which contributes to squatting and slum formation," she said.<br /><br />To meet this housing shortage, she said an investment of more than Rs 6 lakh crore is estimated for construction of houses and related infrastructure.<br /><br />This would require significant contribution from central government, state governments and private stakeholders.</p>
<p>"Housing finance companies (HFCs) and banks hesitate to serve the low-income market for a variety of reasons such as inability to assess credit worthiness, uncertain cash flows and lower profits," she said while addressing the national convention of the National Real Estate Development Council.<br /><br />Noting that involvement of banks and HFCs is essential to bridge the huge housing deficit, Selja said the ministry is planning to set up a guarantee fund for removing the fears of banks and HFCs in providing loans to the economically weaker sections (EWS) and the low income groups (LIG) of the society.<br /><br />"My ministry is in the process of innovating and recommending appropriate risk mitigating instruments to allay the fears of banks/HFCs in extending long term home loans to the poor," she said.<br /><br />Selja expected that with a hedge fund to cover risk in title instruments, more financial institutions would come forward and would foster the goal of inclusive growth of the downtrodden sections of the society.<br /><br />The minister pointed out that despite boom in housing finance, "affordable housing remains a distant dream for the Economically Weaker Sections (EWS) and the Low Income Groups (LIG) of our society".<br /><br />The total urban housing shortage including the backlog and additional requirement would be 26.53 million dwelling units by the end of the 11th Five Year Plan period.<br /><br />"Ninety-nine per cent of this shortfall would be for Economically Weaker Section (EWS) and the Low-Income Group (LIG) segment, which contributes to squatting and slum formation," she said.<br /><br />To meet this housing shortage, she said an investment of more than Rs 6 lakh crore is estimated for construction of houses and related infrastructure.<br /><br />This would require significant contribution from central government, state governments and private stakeholders.</p>