Home truth: Spike in housing finance companies bad loans hobbles PMAY

PMAY-Gramin, which was launched in November 2016, aims to construct 10 million homes by March 31, 2019, with private sector and state government participation

The government’s Pradhan Mantri Awas Yojana (PMAY) scheme faces its first major hurdle as housing finance companies (HFCs) have begun reporting higher non-performing assets (NPAs) in this loan segment.

Kartik Srinivasan, senior vice-president at rating agency Icra, said, “Over the last 12 months, one is seeing delinquencies slowly build up, with the frequency rising largely on account of the impact of demonetisation and the goods and services tax affecting the underlying self-employed borrowers.”
 

With a Budget outlay of ~645 billion for 2018-19, under the PMAY-Gramin or rural focused scheme, so far over 9.87 million homes have been registered for construction