National Conference on Housing Finance in India: Issues and Solutions

Housing Sector plays a vital role in the economic development of the country. However, the housing finance market continues to face considerable supply constraints, particularly in the lower income segment due to the perceived high risk of lending to the informal sector. Traditionally, Banks have been the largest player in the housing finance market, and they continue to hold close to 70% of the total home loan portfolio in India. The other players in the market include; Housing Finance Companies (HFCs), land development banks and housing societies. 

The securitization of housing loan pools and mortgaged loans has been critical in providing co-terminus funding. This has enabled mutual funds to invest in non-convertible debentures (NCD) and commercial papers (CP) issuances by HFCs, diversifying the lender and debt product profile, a key achievement, in addition to making public sector banks accessible to these HFCs. Further, the mortgage penetration in India from formal lending sources is only about 10%, while the remaining 90% of the houses are built using own funds and from informal sources of borrowing. While there are challenges for the Government, there are also opportunities for developers and housing finance institutions. Though many of the HFCs are suffering from the asset liability mismatch, however, HFCs have historically had much lower default rates when compared to the banks and other finance companies

The Government of India has been supportive to the growth and development of Housing sector by addressing various issues through policy implementation whereas developers and housing finance institutions has opportunities to innovate and come up with new products as also technology to supplement housing sector.  However, reforms and initiatives for Housing Finance are further required to provide housing for all.

With a view to discussing various challenges in Housing Finance for bringing growth in Housing market, ASSOCHAM is organizing a National Conference on “HOUSING FINANCE IN INDIA –ISSUES AND SOLUTIONS at 09.30 a.m. on July 13, 2022 at Hotel Le-Meridien, New Delhi. The Conference will bring together all concerned groups to a common platform to provide impetus towards sustainable solutions in housing finance apart from sharing knowledge and experiences amongst stakeholders for an in-depth understanding of issues related to the sector.