Housing finance major HDFC Limited has partnered with the India Mortgage Guarantee Corporation (IMGC) to offer a mortgage-guaranteed home loan product.
The partnership aims to make it possible for HDFC to further penetrate the home loan market and access an enlarged customer base, helping them to own a home of their choice, HDFC said.
This product will help HDFC to offer more loan to a home loan customer on enhanced eligibility as it also helps customers to avail loans beyond their retirement period.
On this partnership for a new product, Renu Sud Karnad, Managing Director, HDFC Ltd., said: “We are determined to strengthen the housing finance segment in India. Our partnership with IMGC is one big step towards it. Mortgage-guarantee is already a popular product in the international market and this partnership will help diversify our offerings to a wider segment of customers.”
She added: “This will also help us to support the government of India’s mission under the Prime Minister Awas Yojana Scheme (PMAY) to provide housing for all by 2022.”
The partnership would address the needs of a wide range of customers in three defined variants. These include middle age-salaried customers, self-employed customers and young salaried customers and a wide segment of customers who have been hitherto unserviced.
Mahesh Misra, Chief Executive Officer, IMGC, said: “HDFC Ltd. is known for its leadership position in the housing finance segment. We are witnessing great acceptance of our product in the Indian housing finance sector. We see stepped-up interest in using mortgage guarantee as an effective risk mitigant across lending categories.”
Mortgage guarantee or mortgage insurance, as it is known in some markets, is well established in the US, Australia and Canada with market penetration of 15 per cent in the US and 22 per cent in Canada. Likewise in India, mortgage guarantee is on the rise with market penetration between 5-20 per cent across lenders who are leveraging the product to grow their books.