Micro housing loan is meant for the Economically weaker section or Low income group, where the borrowers may largely be in engaged in informal segment and financially excluded.The loans are provided towards purchase or construction / renovation of houses. The payment tenure and terms are largely similar to any traditional home loans but at affordable cost.
SMHFC solely focuses on granting loans for housing requirement of the financially excluded population in economically weaker and Low income group segment. Svatantra Housing emphasis on customer centricity and innovation as the centre of business philosophy. With customer centric approach, the company has a unique branchless business model wherein loans formalities and delivery happens at borrowers home. SMHFC employees visit the prospective customer's workplace to understand the need, income, business details of the customer along-with liabilities if any. The company leverages technology to ensure efficient process at low cost and maximum transparency.
As defined by RBI (Reserve bank of India) Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by vulnerable groups such as weaker sections and low income groups at an affordable cost in a fair and transparent manner by mainstream Institutional players.
Micro housing loan clients belong to Low Income Group (LIG) and Economically weaker section (EWS) with limited access to financial services from formal financial institutions such as banks. They may reside in either rural or urban areas but due to lack of proper documents or insufficient collateral security, are unable to utilize banking facilities. The customers are a mix of self-employed micro-entrepreneurs (e.g. vegetable vendors, electricians) and unorganized sector salaried workers (e.g. drivers, housemaids), who either live in rental housing or temporary/ illegal tenements and earning a combined household average income of between Rs.8,000 and Rs.25,000 per month. In rural area our clients may also include covers landless laborers and small and marginalized farmers. The loan can be utilized for either purchasing a property or to construct/repair/renovation/extension on an existing house.
It is a dream of many to buy new house and in rural areas many seek to repair/ renovate their houses. But not many have the financial means to achieve this dream and lack of formal financial solution make this accessibility more difficult. Micro housing loan is a differentiated offering unlike mainstream home loan product. Micro housing loans help the prospective customers meet their housing aspiration, even with a low level of income and in absence of formal documentation.
Svatantra Micro Housing Finance Corporation grants loan up-to 85 % of the cost of the flat upto Rs.15 lakhs. It lends at an average interest rate of 11% -13% p.a. (reducing balance) for Affordable housing purchase (AHP) and 16% for beneficiary led construction (BLC).
Microfinance Housing companies in India are regulated by the National Housing Bank (NHB- Wholly owned by RBI) through its master circulars pertaining to housing loan industry COR No: 02.0071.09
The company has laid down a Customer protection and grievance redressal policy. The overall objective is to protect the customer from concerns emanating out of impact of excessive interest rates, improper/ non-transparent lending practices, coercive collection practices and over-indebtedness among EWS/ LIG borrowers. We emphasizes on responsible lending practices . The three main aspects of these are as follows: