Axiom
Call Us - 91 33 4020 4020  
Sign In  I  Sitemap   
AxiomEstates - India Real Estate
     India Properties Worldwide
Axiom Banner
 
Bookmark and Share
E-mail Print Tell A Friend


Residential Properties

 
 
Indian Real Estate News
Acumen to invest in low-income housing in India
Source: Livemint Mar 02, 2014
Acumen to invest in low-income housing in India

Livemint

Acumen Fund, a New York-based not-for-profit venture fund for businesses that address poverty, is about to make its first investment in the low-income housing space in India.

"We will be investing up to $8 million (nearly Rs.50 crore) in India in 2014, of which around $2 million will be invested in the low-income housing space," said Karuna Jain, a senior portfolio associate of Acumen Fund. "We are actively looking at housing finance companies to invest in and will close our first investments in a couple of months."
Acumen has made 27 investments in India till date across sectors such as agriculture, education, energy and health.

In 2013, the fund invested around $5 million in India.

Jain said most of the capital Acumen invests in India comes from its global corpus, but that it is now looking to raise additional funds locally.

"The challenge with low-income housing is that, if you see, most of the funds for low-income housing available right now are between the Rs.12-25 lakh bracket. We are looking to serve the customer segment which is earning a Rs.20,000 per month salary in a city and will invest in housing finance companies which will, in turn, give loans in rural areas and also to registered slums. We will invest in developers and are looking to invest in Rs.3-10 lakh projects," said Jain.

According to a report by property consultant Jones Lang LaSalle India, the loan market for the Rs.3-10 lakh low-income housing segment is worth nearly Rs.11 trillion.

Despite this, the majority of loans disbursed by home finance companies go to middle- and high-income groups in a loan bracket above Rs.10 lakh. The key issue that stops people from availing housing loans in the Rs.3-10 lakh bracket, the report said, is the perceived high risk of the borrowers - that is fears of uneven repayments and loans turning into non-performing assets.

There is currently a shortfall of 26 million low-cost housing units in India, a figure that goes up every year, said Subhankar Mitra, head, strategic consulting (west), Jones Lang LaSalle India.

"The challenge area is that there are not many players who provide loans to the sub-Rs.10 lakh category. A few public sector banks who have been instructed by RBI (Reserve Bank of India) to do so, and others like Housing Development and Infrastructure Ltd, Tata Capital and microfinance companies like Micro Housing Finance Corp. Ltd are the ones giving such loans," said Mitra.

"And it is not the loan size but the eligibility criteria - most of them do not have a credit history and institutions find it difficult to comply with know your customer norms." added Mitra.


 Leave your comments
  
Comments

Citywise News
    All India
    Kolkata
    Mumbai
    Delhi NCR
    Bangalore
    Goa
    Pune
    Chennai
    Other Cities
News Category
    Home Loans
    Announcements
    Tax and Legal
    Policy
    Commercial
    Infrastructure
    FDI
    Developer
    Others
Axiom