STATE BANK OF INDIA Experience with Pro-Poor Lending

Home Alone… (1/2) SEMI-URBAN LANDSCAPE 1.Number of Semi-urban branches: Home Loans of 3.97 lakhs with limits of Rs crores 3.Number of loans/branch: 100 RURAL LANDSCAPE 1.Number of Rural Branches: Home Loans of 1.80 lakhs with limits of Rs crores 3.Number of loans/branch: 40 SCHEMES 1.Gram Nivas 2.Sahyog Nivas 3.Tribal Plus

Home Alone… (2/2) Number of loans with limits upto Rs. 50,000: 75,500 Number of loans with limits above Rs. 50,000 and upto Rs 1 lakh: 88,700 Number of loans with limits above Rs. 1 lakh and upto Rs 2 lakh: 2,12,00 Average Ticket Size: -Rural Branches: Rs lakhs -Semi-urban Branches: Rs. 4.5 lakhs

Issues With Schematic Lending Availability of plot Title and Title Deeds KYC Lack of Regular Income Borrowing Capacity Servicing Capacity Quality of Construction Monitoring and Disbursement Collection

Role For Government Provision of Plot / Site Construction Expertise Cost Absorption Beneficiary Identification Assumption of Completion Risk Provision of Infrastructure / Electricity / Water Collections

Snapshot: Andhra Pradesh SchemeTargetAchievement NoAmtNoAmt Indiramma Housing Loan Rajiv Gruha Kalpa Vambay Total (Rupees in crores)

The Andhra Pradesh Model Provision of Plot / Site – By Govt. Construction Expertise - By AP Housing Board Cost Absorption – Subsidy Element Beneficiary Identification – Local Body Assumption of Completion Risk – By AP Housing Board Provision of Infrastructure / Electricity / Water – By AP Housing Board Collections – Selective Assistance by Revenue Authorities

Many A Slip… Change In Beneficiary Without Notice to Bank Lack of mortgageable title deed – Finance of basis of allotment letter Allotment letter does not identify unit uniquely Sale by Beneficiary - Third Party Occupation Project Delays Several banks involved in each project – lack of co- ordination

Lessons – 1/2 Political will / sustained budgetary supprt for several years is needed Internal efficiency of implementing agency Registration Facility with waiver of stamp duty Incentive for regular payment

Lessons – 2/2 Set up dedicated cell for each project Associate with beneficiary identification process Continuous borrower contact and education Co-ordination with implementation agency Diligent follow-up

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