Mortgage Financing industry, which is primarily known as the housing finance industry in India was estimated
approximately at US $ 18 billion.
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
|
Sources: All figures in the above table
are calculated and Industry estimates.
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.
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