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Dream home

A roof for the bottom of the pyramid

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CROSSING NEW THRESHOLDS: At the DBS Housing site in Rajkot, Gujarat

Ashoka's unique affordable housing model, which brings together the private sector and NGOs, is expanding its footprint.

Tulsi, a vegetable vendor, looks forward to moving into her first pucca home - a 200-odd square feet flat in the DBS Umang project on the outskirts of Ahmedabad. Ashoka's Hybrid Value Chain (HVC) model brings together the private sector and NGOs in a relationship that transcends the usual donor-recipient relationship. This model currently operates in five states: Gujarat, UP (Ghaziabad), Karnataka, Tamil Nadu and Madhya Pradesh and has facilitated as many as 12, 000 affordable housing units.

"In addition, the concept of HVC entrepreneurs who would help scale this model and advance its reach pan-India has been introduced, as has a financial inclusion platform - Infiniti, which helps financiers with data in the pre-approval stage. On the anvil is India's first Affordable Housing Standard and TUV Rheinland is a partner in the certification process. Parameters that include community involvement will determine the rating and help potential buyers make informed decisions, " explains Vishnu Swaminathan.

SAATH, an NGO, has been closely involved in the DBS Umang project. "Involvement begins from carrying out market to understand needs, which could be something as basic as having loft space and conveying the same to the developers. This helps in sale of the affordable housing units, " explains Rajesh Joshi, founder of SAATH.

SAATH's division Grih Pravesh educates potential buyers on various aspects, vets whether they are eligible for housing loans (EMI rates and the potential buyer's income flows and ability to service loans are factored), helps them prepare a 'file' for finance companies as they generally lack conventional evidence such as salary slips and finally links them with builders and finance companies. Assistance is also given in obtaining PAN numbers or filing tax returns.
While home finance continues to be a challenge for such potential buyers, an emerging breed of finance companies caters to their unique needs. For instance, Aadhar Housing Finance (in which International Finance Corporation holds 20 per cent equity) was set up specifically to cater to this segment of buyers.

Harshil Mehta, CEO, Aadhar Housing Finance (AHFL), appreciates the work done by NGOs. "They have good customer insight and enable financial inclusion. AHFL staff also carries out field visits and through discussions arrives at appraised income, " adds Mehta.

Based on its pilot experience with the Dinesh Nagar Project, SBI became the first nationalised bank to modify its scoring methodology (based on which loan applications are accepted or rejected). "The erstwhile high scoring parameter relating to net worth - in terms of owning jewellery, investments etc was abolished and the high weightage given for income above Rs 2 lakh was diluted (earlier if a person earned less than Rs 2 lakh per annum, he got a zero score) to name a few of the relaxations in methodology, " says Raghav Garg. To widen banking loan access he also suggests a mandatory quota for nationalised banks for small housing loans, with the guarantee fund de-risking such loans.

As one of the first few HVC entrepreneurs, Bangalore-based Abhay Kanjikar is a busy man, bringing all stakeholders on a common platform. For his efforts, the developer pays him a commission of 1 per cent of the project revenue, but his biggest satisfaction is in the blessing he gets from those who now own their affordable dream home.

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