Home Browse Jobs JOB SEEKER Career Advice About Us Contact Us EMPLOYER
facebook linkedin Twitter
Career News and Advice  
Now, home loans from SKS Microfinance
HYDERABAD: Even as realty markets are trying to shake off the downturn impact, SKS Microfinance, the largest microfinance company in terms of assets, is set to offer its customers loans for their housing needs.

The company on Thursday said it has joined hands with the Housing Development Finance Corporation (HDFC) in its attempt to bridge the critical gap in the housing finance needs of the poor.

The pilot project will be conducted in Andhra Pradesh among credit members who have been with SKS for at least three years. These loans will be towards extension and improvement of dwelling units which double as income-generating units like eateries, kirana shops, papad and agarbathi-making units, among others.

Most microfinance clients belong to the low-income category and do not have any documented source of income.

HDFC will provide technology support and the first tranche of funding worth Rs 10 crore. This loan to SKS would help fund about 1,250 members, considering an average ticket size of Rs 80,000. “While SKS will borrow at variable rates, we are lending at fixed rates of interest for a five-year period,” said Suresh Gurumani, CEO, SKS.

SKS member clients can avail loans ranging from Rs 50,000-1 .5 lakh, with tenure between three and five years, which will be delivered at their doorstep. However, unlike other products of SKS, the liability would not be at the group level and it would be offered as individual mortgage-backed loans.

“The launch of our housing microfinance initiative follows massive demand from our members who have no access to formal institutional funding. The interest rates charged are risk-adjusted rates that compare well with industry rates for urban self-employed and non-formal sector clients,” said Mr Gurumani.

According to him, the operational costs and risks are much higher as borrowers of these loans do not have any income papers or bank accounts and all transactions are in cash. Also, while we borrow at variable rates, we are lending at fixed rates of interest for a five-year period,” he added.

“This association helps HDFC to contribute to the financial inclusion story of India by reaching services to the grassroot levels. We hope that similar efforts of other MFIs would facilitate in shaping the housing microfinance sector,” Renu Karnad, joint managing director, HDFC, said. Other MFIs including Basix and Spandana had offered similar products earlier.
Source :
The Economic Times
For more information on Microfinance Click here
  More Articles
Microsoft to drop Messenger, switch to Skype View: Dont panic, robots are not job snatchers
More firms but fewer offers at IITs this year IIT students set to land crore-plus salary offers from Microsoft, Oracle
Infosys, TCS, Wipro go slow on hiring Yes Bank asks MFIs to return Rs.100 cr loans