Post by johnson51 on Dec 2, 2011 5:17:00 GMT -5
Besides the sincere efforts of the Housing and Urban Development Corporation (HUDCO), the role of the Life Insurance Corporation (LIC) and the Housing Development Finance Corporation (HDFC) is worth mentioning. LIC’s contribution to housing is rather commendable. Out of the total lending done by the LIC, nearly 11 percent is earmarked for housing development.
It is the single largest provider of funds for house-purchase, accounting of about 10 percent of the total indirect institutional finance. It caters to the financial needs of the various Housing Boards, HUDCO, and other institutions. It also provides loan under “Own Your House Scheme”, loan on mortgage of houses, loans to employees, etc. The interest rates vary between 7.5 percent and 12.0 percent.
However, the major drawback of the LIC’s contribution to housing development is that it does not give loans directly to individuals. On the other hand, the HDFC makes available such housing loans. It follows varied interest rate policies unlike HUDCO’s rigid lending terms. Though it lends directly to individual borrowers, the lending programmes are out of reach of the poor, and those households with marginal incomes in the rural and urban areas.
When considering the necessary funds to develop a Home in Kerala , the foregoing discussion on the role of the public sector seems to be insignificant when compared to the mammoth backlog of housing needs that have accumulated over the years and are still rising sharply. In spite of the direct involvement of the public sector over the last four decades, the poorer sections have not benefited from these investments due to various impediments and they continue to depend on their own initiatives to form small dwelling units mostly in unauthorized sites leading to the formation of slums.
The total investment of the public sector in housing development over the years has been thus far from satisfactory. Instead of an increase in the allocation of the necessary finances, it is noticed that the proportion of investments in housing to the total national investment has been progressively declining over the recent plan periods, except for a marginal increase during the Seventh Five Year plan.
It is the single largest provider of funds for house-purchase, accounting of about 10 percent of the total indirect institutional finance. It caters to the financial needs of the various Housing Boards, HUDCO, and other institutions. It also provides loan under “Own Your House Scheme”, loan on mortgage of houses, loans to employees, etc. The interest rates vary between 7.5 percent and 12.0 percent.
However, the major drawback of the LIC’s contribution to housing development is that it does not give loans directly to individuals. On the other hand, the HDFC makes available such housing loans. It follows varied interest rate policies unlike HUDCO’s rigid lending terms. Though it lends directly to individual borrowers, the lending programmes are out of reach of the poor, and those households with marginal incomes in the rural and urban areas.
When considering the necessary funds to develop a Home in Kerala , the foregoing discussion on the role of the public sector seems to be insignificant when compared to the mammoth backlog of housing needs that have accumulated over the years and are still rising sharply. In spite of the direct involvement of the public sector over the last four decades, the poorer sections have not benefited from these investments due to various impediments and they continue to depend on their own initiatives to form small dwelling units mostly in unauthorized sites leading to the formation of slums.
The total investment of the public sector in housing development over the years has been thus far from satisfactory. Instead of an increase in the allocation of the necessary finances, it is noticed that the proportion of investments in housing to the total national investment has been progressively declining over the recent plan periods, except for a marginal increase during the Seventh Five Year plan.