Indian companies Tata Housing Development Company Ltd., a subsidiary of the massive Tata Group, and the Micro Housing Finance Corporation (MHFC) have partnered to offer low cost housing. While Tata Housing will facilitate construction of the residential complex Shubh Griha, MHFC will provide long term micro mortgages to approved applicants. The cost of the homes ranges from USD 8,300 to USD 14,200. According to India´s Ministry of Housing and Urban Poverty Alleviation, there is a housing shortage of about 24.7 million units in the country, with 99 percent of this shortage pertaining to low income households.
The apartment flats at Shubh Griha include either one room and a kitchen or one bedroom, one hall, and a kitchen.The flats will range from about 300 to 500 sq.ft. in size. The apartment complex will include a school, playground, hospital, community center, jogging track parking and gardens. To view building plans for the flats, see this page.
The Indian government launched the Jawaharlal Nehru Urban Renewal Mission (JNNURM) in 2005 to improve slum areas and build 1.5 million houses for low income households. The government´s 11th five-year plan from 2007 to 2012 includes the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP), through which an annual interest subsidy of 5 percent will be granted to loans of USD 2121 taken during the plan period. The duration for these loans would be 15-20 years. MicroCapital has recently reported on the launch of housing loans and home improvement loans by Indian microfinance institutions (MFIs), SKS Microfinance, Madura Micro Finance and Grama Vidiyal.
MHFC was incorporated in May 2008 and holds a Certificate of Registration from the National Housing Bank of India. MHFC extended 1500 mortgages in its first year of operation for a total of about USD 9.5 million to USD 12.7 million in loans (p5). Financial data for MHFC is not yet available. MHFC offers loan amounts of less than USD 10,600 for a maximum of 15 years. Interest rates will range from 12 to 14 percent. The loan will constitute 75 percent of the home’s value, with the borrower contributing 25 percent. The target customer would be earning a minimum of USD 212 per month and would pay an Equated Monthly Installment (EMI) of USD 85 for 15 years (p5).
Tata Housing was established in 1984 and is a subsidiary of major Indian conglomerate Tata Sons Limited, which holds a 97.5 percent stake in its equity capital. Services include identifying land for projects and conceptualizing and designing projects as well as management, and marketing. Other current residential projects in India include the luxury residential complexes Aquila Heights in Bangalore and Raisina Residency in Gurgaon.
No financial information for Tata Housing is available, although financial data for other companies in the Tata family can be found here. In 2007 to 2008, total revenue of all Tata companies, was USD 62.5 billion. Although Tata was founded and is based in India, 61 percent of total revenue came from business ventures abroad. Tata companies include Tata Motors, Indian Hotels, Tata Power, Tata Steel, and Tata Chemicals, among others. Each company operates independently.
Additional Resources:
“Tata Housing, MHFC Tie Up to Offer Home Finance”, Published by The Economic Times, May 2009
“Rooms With a View”, By Pritha Sen, Published by The Pluralist, April 2009
¨Year End Review 2008: Ministry of Housing and Urban Poverty Alleviation (HUPA)”, Published by Press Information Bureau Mumbai, December 2008
“SKS Microfinance, Madura Micro Finance and Grama Vidiyal to Offer Home Loans in India”, By Laura Anderson, Published by MicroCapital, April 2009
Shubh Griha: Home
Tata Group: Home
Tata Housing Development Company: Home
MHFC: Home
Jawaharlal Nehru National Urban Renewal Mission: Home
Ministry of Housing & Urban Poverty Alleviation: Home
By Goda Thangada, Research Assistant
Similar Posts:
- MICROCAPITAL BRIEF: Incofin Places $4.3m in Equity in Varashakti Housing Finance via India Progress Fund
- MICROFINANCE PAPER WRAP-UP: “Microfinance in India: Issues, Challenges and Opportunities;” by Mohammad Abu Saleh, Zubair Ahmad
- MICROCAPITAL BRIEF: Belgian Investment Company for Developing Companies (BIO) Names Joris Totté as CEO
- MICROCAPITAL BRIEF: Reefy Microfinance Borrows $6.5m from EBRD for Youth-led MSMEs in Egypt
- MICROFINANCE EVENT: Sa-Dhan National Conference on Inclusive Growth; November 8-9, 2023; New Delhi, India
