Micro Housing Finance Corporation, a housing finance company focusing on financially excluded urban lower income families, has met the milestones necessary for it to secure second round funding from its main external investors, Indian Financial Inclusion Fund and Michael & Susan Dell Foundation.
-- Micro Housing Finance Corporation ("MHFC"), a housing finance company that is focused on providing housing loans to financially excluded urban lower income families, has met the milestones necessary for it to secure second round funding of Rs. 19 cr from its main external investors, the Indian Financial Inclusion Fund ("IFIF") and the Michael & Susan Dell Foundation. The two institutions had invested Rs. 6 cr as initial funding in December 2009, with the balance Rs. 19 cr infusion subject to MHFC meeting growth and credit milestones.
With this funding, MHFC's equity now stands at Rs. 37 cr. It is also in the process of raising debt and is in discussions with several financial institutions, including its regulator, the National Housing Bank, which has granted MHFC an in-principle financing line.
MHFC expects to close FYE 3/2011 at Rs. 30 cr in loan sanctions. Its customers include mostly individuals employed in the informal sector, ranging from self employed vegetable vendors and barbers to salaried employees like housemaids, drivers and security guards. For FYE 3/2012, its loan sanction target is Rs. 100 cr.
According to Madhusudhan Menon, Chairman - "This infusion is an important transaction as it represents additional equity to fund our fast growing lending operations, and confirms the completion of the first set of milestones that we had set. We believe that this is validation of our investors' confidence in an idea which has not been tested by any financial institution till date - that customers who have adequate but undocumented incomes are good credit risks for secured mortgage lending."
"Over the last 15 months, MHFC has been able to prove the assumption that access to appropriately structured mortgage financing for low income families stimulates a greater supply of affordable housing units and begins to make a positive change in the quality of life of those families. Further, MHFC have been able to do this in a scalable and commercially-viable manner," added Geeta Goel, from the Michael & Susan Dell Foundation.
"IFIF's additional infusion in MHFC reaffirms the Fund's belief in the company's vision, the scalability of its business model, and the management. MHFC has demonstrated that a focused, client-centric approach is essential for developing viable and inclusive financial products. We are delighted to be partners in this innovative venture," said Mona Kachhwaha, Investment Director, Caspian Advisors.
MHFC received its license from the National Housing Bank in February 2009 and began operations in June 2009. Its loan amounts are usually around Rs. 5 lakhs (not exceeding 80% of the cost of the house) for a period not exceeding 15 years, with the house serving as security for the loan. Its rate of interest is currently between 12% and 14% per annum. It has a project-led approach and ties up with developers, both public and private, who have a similar focus on urban affordable housing (as defined as being in a price range not exceeding Rs. 10 lakhs). Partnerships include tie-ups with builders like Tata Housing, Poddar Developers and Usha-Breco Realty in Mumbai. MHFC also has an active presence in Pune, Ahmedabad and Kolkata, and is currently operational in over 25 low-income housing projects across the country. The company plans to expand its outreach to Chennai, Bengaluru, Meerut, Indore, Nagpur and the NCR over the coming year.
Notes to Editor
ABOUT MICRO FINANCE HOUSING CORPORATION: MHFC is a housing finance company headquartered in Mumbai, India, focused on serving lower income groups in urban areas, specifically those in the informal sector. MHFC, through this initiative, seeks to efficiently and sustainably enable access to housing finance services to the underserved and un-served segments of the urban population. For more information on MHFC, please visit http://www.mhfcindia.com.
ABOUT INDIA FINANCIAL INCLUSION FUND: IFIF, set up in August 2008, is an India-focused microfinance equity fund based in Mauritius and is advised in India by Caspian Advisors Private Limited. IFIF is focused on making equity investments in microfinance institutions and microfinance enablers in the country that are directly or indirectly associated with bringing about the financial inclusion of the poor. For more information about Caspian Advisors and funds advised and managed, please visit http://www.caspian.in.
ABOUT MICHAEL & SUSAN DELL FOUNDATION: The Michael & Susan Dell Foundation (http://www.msdf.org) is dedicated to improving the lives of children living in urban poverty around the world. With offices in Austin, TX, New Delhi, India, and Cape Town, South Africa, the Dell family foundation funds programs that foster high-quality public education and childhood health, and improve the economic stability of families living in poverty. The foundation has committed more than $700 million to global children's issues and community initiatives to date.
Journalists and Bloggers
Visit India PRwire for Journalists (http://www.indiaprwire.com/subscription/) for releases, photos, email alerts and customized feeds just for Media.
Source/Permanent Link: http://www.indiaprwire.com/pressrelease/financial-services/2011033082119.htm
© Copyright 2017. India PRwire (http://www.indiaprwire.com/) - A Dark Blue Technologies Company