Micro Build India
Habitat Micro Build India Housing Finance Company Pvt. Ltd. (MBIND) was incorporated in November 2010. MBIND is registered as a Housing Finance Company (HFC) with National Housing Bank (June 2012). MBIND is an initiative of Habitat for Humanity International, a global non-profit housing organization that has served more than 600,000 families by building or improving homes. Veteran Mumbai investor and owner of D-Mart chain of hypermarket and supermarkets Mr. Radhakishan Damani and Mumbai-based financial services company ASK Group are the other key stakeholders of MBIND.
MBIND is part of the global MicroBuild Fund, an initiative by Habitat for Humanity International that invests in shelter-related microfinance products provided through local financial institutions.
Micro Build India’s Vision
The vision of MBIND is to catalyse innovative, scalable financial solutions to the poverty housing situation in India.
This vision is drawn from Habitat for Humanity’s strategic plan to mobilize people, finance and social capital to promote worldwide access to decent, safe, affordable housing.
Objectives and Business Model
Micro Build India’s operational objectives are to reduce poverty housing, and improve health and living environments for low-income families across India by way of:
1. Term Loan facilities to financial institutions including MFIs and HFCs in India which in turn will be used them to extend financial assistance to their customers for the purpose of home improvements (such as house repairs)
2. Partnering institutions such as MFIs to directly extend loan facilities to its customers where the institutions would act like business correspondents (“Business Affiliate”). They are expected to originate loan applications and recommend suitable files for sanction. MBIND will share portions of interest revenue earned and processing fee emanating of these loans. Further, business affiliates are expected to indemnify MBIND a portion of total loans disbursed through the partnership
3. Providing Technical Assistance through our Technical Assistance Services (TAS) division, in order to support the said institutions to design and offer housing loan products to meet the requirements of beneficiary families
Opportunity and Benefits
As per 2011 Census, there are 246.7 million households in India, and the shortfall of houses in India is pegged at 62.5 million. Within this, housing shortage pertaining to EWS, LIG and BPL category is estimated at 57.86 Million units – emphasises prevailing large demand-supply gap. Further, only 53% of the households are termed to be in “Good” condition and remaining are in “Liveable” and “Dilapidated” conditions – presenting opportunities to support ‘repair’ and ‘improvement’ activities undertaken.
MBIND believes housing microfinance can be linked to other products offered by MFI because it fits the mind-set that micro-financing is incremental with income generating loans as steps towards asset building and therefore tends to be part of the ‘graduation’ process after the borrower has established a lending history with the MFI. It can be a powerful tool to retain customers and the fact that borrower’s history with MFI offers good proxy for assessment of repayment capacity. They are provided based on generally accepted microfinance principles – (short repayment period, relatively small amount, based on repayment capacity, market rate) and works within a vision of housing as one of many products MFIs can offer the poor alongside more established products.
This leaves us with enormous opportunity to support each other as MBIND looks forward to work together towards reducing poverty housing and improve health and living environments.