Rural housing fund corpus doubled to Rs 2,000 crore

The corpus of Rural Housing Fund (RHF), a scheme set up by the National Housing Bank (NHB) to provide refinance for rural housing, has been doubled to Rs 2,000 crore.

NHB Chairman and Managing Director S Sridhar told Business Standard that in July 2008 the corpus was Rs 1,000 crore, which has now been increased to Rs 2,000 crore.

Rural housing finance in the country is estimated to be less than Rs 10,000 crore, of which about 10 per cent flows to rural housing. The fund’s primary objective was to meet the shortfall in lending towards rural housing by people in the weaker section category.

The weaker section group includes small and marginal farmers with land holding of 5 acres and less, and landless labourers, tenant farmers and share croppers, women, individuals eligible for loans under Swarjayanthi Gram Swar-ozgar Yojana and Differential Rate of Interest — classified as BPL or marginally above the poverty line, scheduled castes, scheduled tribes and people from minority communities.

The housing finance company regulator had formulated RHF last year to strengthen the credit for housing finance in rural areas. Supporting a company that focussed on extending home loans in rural and semi-urban areas was in step with this objective.

He noted that until now around Rs 1,400 crore has been disbursed from the fund to prime lending institutions.

The regulator was also planning to involve Regional Rural Banks (RRBs) in the process. There was a major scope for growth in rural housing finance, Sridhar added.