CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES

<h1>CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES</h1>Author: <a title="R.Yuvarani" href="http://www.articlesbase.com/authors/r.yuvarani/151968.htm">R.Yuvarani</a> CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES HDFC has been making continuous and sustained efforts to reach the lower income groups of society, especially the economically weaker sections, thus enabling them to realise their dreams of possessing a house of their own. HDFCs' response to the need for better housing and living environment for the poor, both, in the urban and rural sectors materialised in its collaboration with Kreditanstalt fur Wiederaufbau (KfW), a German Development bank. KfW sanctioned DM 55 million to HDFC for low cost housing projects in India. HDFCs' approach to low-income lending has been extremely professional and developmental in nature. Negating the concept of dependence, HDFCs' low cost housing schemes are marked by the emphasis on peoples participation and usage of self-help approach wherein the beneficiaries contribute both in terms of cash and labour for construction of their houses. HDFC also ensures that the newly constructed houses are within the affordability of the beneficiaries, and thus promotes the usage of innovative low cost technologies and locally available materials for construction of the houses. For the purpose of actual implementation of the low cost housing projects, HDFC collaborates with organisations, both, Governmental and Non-Governmental. Such organisations act as co-ordinating agencies for the projects involving a collective of individuals belonging to the Economically Weaker Sections. The projects could be either in urban or rural areas. The security for the loan is generally the mortgage of the property being financed. The construction work is regularly monitored by the co-ordinating agencies and HDFC. The loans from HDFC are disbursed depending upon the stages of construction. To date, HDFC has experienced 100% recovery for the loans disbursed to various projects. R.Yuvarani, M.Phil Scholar, Department of commerce, Periyar University, Salem-11About the Author: R.Yuvarani, M.Phil Scholar, Department of commerce, Periyar University, Salem-11
Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/finance-articles/credit-mechanisms-adopted-by-hdfc-india-for-funding-the-low-income-group-beneficiaries-1045598.html" title="CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES">CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES</a>

CREDIT MECHANISMS ADOPTED BY HDFC (INDIA) FOR FUNDING THE LOW INCOME GROUP BENEFICIARIES

HDFC has been making continuous and sustained efforts to reach the lower income groups of society, especially the economically weaker sections, thus enabling them to realise their dreams of possessing a house of their own.

HDFCs' response to the need for better housing and living environment for the poor, both, in the urban and rural sectors materialised in its collaboration with Kreditanstalt fur Wiederaufbau (KfW), a German Development bank. KfW sanctioned DM 55 million to HDFC for low cost housing projects in India. HDFCs' approach to low-income lending has been extremely professional and developmental in nature. Negating the concept of dependence, HDFCs' low cost housing schemes are marked by the emphasis on peoples participation and usage of self-help approach wherein the beneficiaries contribute both in terms of cash and labour for construction of their houses. HDFC also ensures that the newly constructed houses are within the affordability of the beneficiaries, and thus promotes the usage of innovative low cost technologies and locally available materials for construction of the houses.

For the purpose of actual implementation of the low cost housing projects, HDFC collaborates with organisations, both, Governmental and Non-Governmental. Such organisations act as co-ordinating agencies for the projects involving a collective of individuals belonging to the Economically Weaker Sections. The projects could be either in urban or rural areas.

The security for the loan is generally the mortgage of the property being financed.

The construction work is regularly monitored by the co-ordinating agencies and HDFC. The loans from HDFC are disbursed depending upon the stages of construction. To date, HDFC has experienced 100% recovery for the loans disbursed to various projects.

R.Yuvarani, M.Phil Scholar, Department of commerce, Periyar University, Salem-11

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