India: Affordable housing market attracts a surge of finance companies
Report by India Independent Insight
The Pradhan Mantri Awas Yojana (PMAY) has provided opportunities for low-income individuals to own homes in urban areas through the Credit Linked Subsidy Scheme. The scheme has benefited both home borrowers and real estate developers, as the government bears a substantial subsidy burden. The affordable housing market is thriving, especially in Tier 2 and Tier 3 locations, attracting a surge of finance companies. However, there are risks associated with above-average growth and credit decisions. Attrition rates are high and employee behaviour can impact loan disbursal. The market could be at a cyclical peak.
Companies covered include Aptus Value Housing, Aavas Financiers, Home First Finance, Capri Global, Mahindra Finance, AU Small Finance Bank, IIFL, Piramal Enterprises and Five-Star Business Finance.