Livemint.com, an affiliate of The Wall Street Journal, reports that only two microfinance institutions of seven surveyed have forayed into housing finance. Default worries are holding back the others, who generally loan to groups, not individuals. A senior official at SKS Microfinance Ltd, who did not wish to be identified, was quoted as saying, “It’s a different and a difficult ball game. We do not know yet how to price it…defaults would be high.” On a pilot basis, Madura Micro Finance Limited is offering 100 customers up to the equivalent of USD 2200 for the purchase or construction of a house. Whereas self-help group loans are priced at up to 21 percent interest, the housing loans are set at 18 percent to attract customers.
Source:
Livemint article:
http://www.livemint.com/2009/11/23212808/MFIs-wary-of-housing-loans-ove.html
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