Challenges and Opportunities of Informal Housing Finance in Rural Area of India | Original Article

ABSTRACT:

Housing is one of the basic needs as its not only provides the shelter but also gives security, protection and respect to the people in society. In present scenario building our own house by using self-owned funds is not affordable as one has to look for other investment too. But with the growth of Indian banking system and NHB, made this possible to fulfill anyone dream of building his own house. Since 1985 National housing bank along with other formal financial institutions have disbursed housing loan in various regions of the country. Government has launched various housing schemes by which large population of the country get their home. These benefits are easily available in urban area. However in rural area where people are engaged in informal sectors often faces problem in getting loan from formal sources and banks because of their complex formalities and procedures of loan disbursement. Therefore the population of rural area has to be dependent on informal sources of finance and they always seek informal housing schemes for building their houses. In present paper it has been discussed that why rural poor have limited access for housing finance and also thrash out the differences between informal and formal housing finance sources. It is observed in the paper that if microfinance and informal sources are well implemented in rural areas for loan disbursement then large population would be benefitted and will able to afford the loan and be able to fulfill their dream of making their own house.