Repco, NHB tie up to provide Housing Microfinance
National Housing bank has tied up with Repco Foundation for Micro Credit to disburse micro-housing loans on a pilot basis in five districts in Tamil Nadu.
The housing loans will be disbursed to self-help groups (SHGs).
Chennai-based Repco Foundation for Micro Credit, promoted by State-owned Repco Bank, is a Section 25 entity and has so far disbursed loans worth Rs 50 crore among 5,000 SHGs.
Mr M Balasubramanian, managing director, Repco Bank reportedly said that the entity plans to disburse at least Rs 10 crore of credit for housing in 2008.
The loans will be initially disbursed in five districts in Tamil Nadu- Nilgiris, Coimbatore, Trichy, Madurai and Karur.
Only those individuals who have been associated with Repco for at least two years are eligible for a loan. Each SHG will provide the guarantee for the loan and disburse the loan to the concerned individual.
The loan amounts disbursed will range from Rs 25,000 to Rs 2 lakh, at an interest rate of 11.5% per annum. The repayment period in such a loan is 84 months and loans up to Rs 50,000 will not require any collateral.
The housing loans will be given to people who already own the land and will be mostly used for renovation and additional construction, which usually takes around Rs 50,000. As per the agreement, NHB will provide 100% refinancing for the loans disbursed.