Affordable housing brand XRBIA has announced its plans to offer a No-Income-Proof-Home-Loan Scheme to home seekers across the country. The initiative is promising news for the estimated 400 million Indians who work in the informal sector, and who consequently have been unable to meet the income-proof requirements of traditional lenders.
The price of a house on the Xrbia development will be INR. 7.70 lacs for a 1BHK. Furthermore, customers are eligible for a subsidy of INR. 2:20 lacs via a government subsidy introduced under Pradhan Mantri Awaas Yojana which is designed for families with a household income of INR. six, or below. In order to qualify for this subsidy, applicants – who must be Indian citizens with basic identity documents, such as an Aadhar card, passport or ration card – will have to provide proof of residence, a no banking default declaration and bank account statements from the previous 12 months, before attending a personal interview. Importantly, no income proof documents will be required, which has previously presented a major stumbling block for those in the informal sector trying to access financial resources. This initiative is the first time a real estate developer is offering such a scheme, and is supported by all major banks.
The Indian labour market is characterised by the predominance of informal employment, with almost 50% of national income being generated in the informal sector. This vast number of individuals have no access to workplace benefits, such as social security and unemployment insurance. The majority of those who work in the informal sector have also been denied access to financial services by conventional lenders, who require official work contracts from loan recipients. This policy has prevented a significant proportion of the population from being able to purchase a home, despite having the means to take on a loan.
Seeking to finance 10,000 potential homeowners and anticipating significant interest, Xrbia’s customers will need to reserve an apartment with a down payment of INR. 18,790 at one of Xrbia’s booking centres or agents through an automated booking process. “The No-Income-Proof Home Loan Scheme will make owning a home a possibility for every Indian, regardless of their background” says Rahul Nahar, the Managing Director of XRBIA. Indeed, providing access to financial services to this sector of the population will likely increase demand from this untapped market segment, and expand opportunities for individuals and families aspiring to own a home.
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