CONSTRUCTION FINANCE: LENDERS PERSPECTIVE Lower and Middle Income Segment

India - Preview Total Population of India-1.5 billion

India - Preview Economic Classification (E) Rich (Above 115,000 ) High Income (57,000–115,000 ) Working class (10,200–23,000) Needy (Below 10,200 ) Annual Household Income (in US$)* * In PPP terms Population (million)

Need for Affordable Housing Huge gap between demand & supply Developer focus on Higher Income Groups in Urban areas with higher margins. Un-regulated/Un-authorised/ Un-planned housing units for the lower and middle income group Inadequate infrastructure & basic amenities in Low-cost projects/ units Inadequate access to affordable finance to the lower and middle income segment

The Rural Story… Migration from rural to urban areas Attractive employment opportunities Increase in family size Poor availability of basic amenities for education, medical facilities, entertainment, lifestyle etc. Aspirations for upward economic mobility Significant short haul migration to smaller towns by persons moving to non-agricultural employment

Opportunities… Opportunities for developers and Lenders Significant opportunities in tier II & III locations Large untapped demand for affordable housing Lower land cost and relatively stable prices Adequate margins available to both Good demand for well developed basic layouts in Gram panchayat areas abutting small towns Lower risks as purchasers are end users not speculators or investors

Opportunities… Opportunities for developers and Lenders Sell and build model for small units as opposed to build and sell lowers project selling risk Lower project cost disperses lenders risks & lowers barriers to entry for smaller builders/developers Local developers more in tune with local market Local market fairly insulated from global swings Remittances from larger urban centers create upgrade demand for family homes

Our Initiatives in affordable housing

Financing Self Construction on owned land

Plot Loans with construction finance

Ready Unit finance

Finance for layout development & construction

Project finance for apartment construction

Project finance for mass affordable housing

DHFL Property Services Tie-ups with various developers in tier II and III locations for project cost management and sales Provide technical and legal support Introduce technologies to reduce cost and time of construction Help create proper amenities like roads, schools, hospitals, playground, clean drinking water, drainage etc.

Mass Housing Scheme in the MIG and the LIG segments like MHADA and DDA initiatives with private developers for larger towns Increasing availability of affordable housing close to workplace by regulating land use in newly developing townships & redevelopments Support for infrastructure development in smaller towns and rural locations Recommendations

Government subsidies and tax exemptions to developers and HFCs in tier II & III locations Provision of housing finance at a lower interest to individuals in the Low and middle income segment Refinance from NHB to HFCs to promote larger affordable housing schemes in urban and rural locations Recommendations

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