The NATIONAL HOUSING BANK (NHB) has today signed an Agreement with
SRI PADMAVATHY MAHILA ABYUDAYA SANGHAM (SPMS), Tirupati, a Federation of women SHGs affiliated to Dhan Foundation to finance construction of 300 houses in a significant slum redevelopment project.
The project will fulfil the dreams of 300 women who are currently living in thatched huts in various slums of Tirupati. Most of these women are primary earners for their family. They are small traders, vendors, daily wage labourers and artisans. They have formed themselves into Self Help Groups (SHGs), with the objective of developing regular savings and credit habit based on the principles of mutual sharing and cooperation.
The houses will have a plinth area of 218 square feet and will cost Rs. 60,000/ approximately. The members of the SHG will bring in Rs. 10,000/- as their own contribution, from their own hard earned savings in their Group schemes.. NHB’s loan component will be Rs. 50, 000/- per dwelling unit, totalling Rs. 1.5 crores, at concessional rate of 6.5%. The loan will be repayable in 15 years. Land for the purpose, in most cases, has been allotted by Tirupati Urban Development Authority. The project will be closely monitored by NHB.
While presiding over the function, Shri P.K. Gupta, Chairman and Managing Director of NHB said that the project marks the beginning of NHB’s entry into informal sector financing and its affirmation to facilitate the flow of credit to the weaker segments of society, who can not otherwise access credit from the normal banking system.
Shri Gupta emphasised that being the Apex Financial Institution in the housing sector, NHB’s major thrust area would be provision of housing for the poor. To provide rural housing, he stated that the Bank is implementing a national scheme, viz. Golden Jubilee Rural Housing Scheme, where the annual targets are fixed by the government and NHB provides refinance at concessional rates of interest, and also supervise the achievement of targets. Against a target for financing construction of 2,50,000 houses set for the year 2004 – 2005 under the scheme, 70% has been achieved by 31st December, 2004 itself. Commenting on the role of Micro Finance Institutions in housing, Mr. Gupta stated that their housing programmes need to be self sustainable to attract affordable funds from financial institutions like NHB. NHB has similar projects from other the MFIs in the pipeline, he added.
The Loan Agreement was signed by Shri K.Muralidharan, Deputy General Manager on behalf of NHB and Shri Y. Venkateshwarlu, Managing Director and Smt A Jayanthi, Chairperson on behalf of SPMS.