Small housing loans increase in Tier I and Tier II cities

Affordable low-cost housing loans in cities and Tier 1 and 2 rural areas have seen an uptick as banks focus on lending to individuals in these areas to spur credit growth, people said. aware of the issue. The government also wants banks to push credit through programs such as PM Awas Yojana (PMAY). Housing loans, including loans to priority sectors, rose 6.4% year-on-year in March, according to the latest data.

“There is definitely a demand in this segment which is being aided by various central and state government programs,” said a senior official at the state-run Central Bank of India, speaking on condition of anonymity. “Most of these loans are safe because they benefit from government subsidies, around 3 to 6 percent.”

According to the latest data, under PMAY (urban), 11.4 million houses involving central assistance of 1.86 lakh crore have been sanctioned so far. Of the sanctioned homes, nearly 9.29 million have been grounded for construction – 5.44 million of them have been completed and the rest are in various stages of construction. Under PMAY (rural), 22.9 million houses were sanctioned.

“We have been surprised by the growth this segment has seen over the last fiscal year. For us, disbursements for PMAY projects have been a huge success, especially in cities like Ujjain, Alwar, Bhiwani, Agra, Sonipat, Ajmer and Bulandshahr,” said Atul Monga, CEO of BASIC Home Loan.

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