A significant change in the structure of the mortgage industry is being marked in the recent years. Presently the banks are gaining market share in direct housing finance segment. From estimation it is found that the share of commercial banks in the direct housing finance segment has increased from 27% in FY 2000 to 57% in the FY 2003.
Though the housing finance industry in India is growing for the past few years still financing through the organized sector continues to account only for 25% of the total housing investment in India (Source: LIC Housing finance).
The top players in this industry are housing finance companies, commercial (local as well as foreign) banks, cooperative banks and other non-banking financial companies (NBFCs).
Presently the commercial banks are set to take the major portion in next years. Presently Housing Development Finance Corporation (HDFC) is the market leader followed by State Bank of India (SBI). The Industrial Credit and Investment Corporation of India (ICICI) Bank and the Life Insurance Corporation (LIC) Housing Finance Limited also have significant market share.
The industry sources has reported that, 8 to 10 percent of the market share that foreign-owned banks have in the industry, Citibank has 5 percent share, followed by Standard Chartered and HSBC with about the 3 to 5 percent.
Housing Finance Disbursement In India
Here the table gives us a clear picture on the trend in organized housing finance disbursements in India.
| US $ Billion | FY 03 | FY 02 |
| Housing Finance Companies | 3.91 | 3.24 |
| Banks Direct | 5.24 | 1.91 |
| Banks Indirect | 1.51 | 1.26 |
| Total Direct | 9.15 | 5.15 |
| Growth Rate % | 77.6 | 27.5 |
Housing finance disbursements have increased at a compound annual growth rate of 45.6% in the recent years with FY 2003 reporting a phenomenal 78% growth. While the growth in fresh purchase of housing assets may be lower than the disbursement growth because of the increasing incidence of loan takeovers (by competitors), it still remains high.
In case of India there is a stiff competition in the financial services mainly from the European Banks like ABN Amro, HSBC and Standard Chartered bank.
Top U.S. financial services companies are active in the asset securitization market in India are Citibank, GE Countrywide, Morgan Stanley etc. but not all of them are engaged in the market right now.
Home Loan Disbursement In India
The home loan disbursement by the banks and housing finance companies has increased from Rs.29359.29 Crores in 2001-02 to Rs.51672 .7 Crores in 2002-03.
Home Loan Disbursement (Rs.In Crores)
| Years | HFC's | Banks |
| 1999-00 | 9812.03 | 9911.35 |
| 2000-01 | 12637.85 | 9787.24 |
| 2001-02 | 14614.44 | 14744.85 |
| 2002-03 | 17832.17* | 33840.53 |
Sources: -National Housing Bank
The share of banks in total home loan disbursement has increased from 43.6% in the year 2000-01 to 65.5% in 2002-03.
Mortgage To GDP Ratio In India
The Mortgage to GDP Ratio (ratio of outstanding home loans to GDP) in India is very insignificant in comparison to the other countries. In the developed countries the ratio varies from 25% to 60%. For the year 2001,the mortgage to GDP ratio in India was at 2.5%.
IFC and India’s Housing Finance Market
The International Finance Corporation, the private sector arm of the World Bank Group, has provided financing package of $200 million to HDFC (Housing Development Finance Corporation).
The loans of IFC’s strategy are to assist the expansion of financial markets in India and, in particular, to promote access to housing finance by middle-and lower middle- income households. In the year to June 30, 2003, IFC committed to invest up to $388 million in projects in India.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives.
IFC finances private sector investments in the developing world, mobilizes ital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses.
No comments:
Post a Comment