Housing Challenges: CRIF Insights

The Pradhan Mantri AwasYojana (Urban) target of building 10 mil­lion homes in the 2015-22 period was always a longshot. Union ministry of housing and urban affairs' figures now show just how much of a longshot it was.

Over the past three years, 5.49 million houses have been sanc­tioned under the scheme. That's good progress. However, only 15% of them have been built so far. That doesn't bode well. That isn't the only problematic aspect of the programme either.

Lenders are facing sharply ele­vated risk among borrowers tar­geted by the programme. "Pay­ments of interest and principal of 1.96% of overall home loans are due for more than 90 days according to rating agency Crif Highmark. For those that borrowed less than Rupees 25 lakh, classified as the affordable housing segment, the figure is 2.33% as of November 2017. The smaller the ticket size gets, the greater the risk: in the sub- Rupees 10 lakh segment, the default rate is 4%."

Affordable housing is a laudable goal but with loans in this segment making up half of all housing loans, the elevated risk is dangerous.


Mint| Page No 01 |Edition: National