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New Delhi, Aug 12 In a first ever equity investment in a rural housing finance company, National Housing Bank (NHB) will pick 12.5 per cent stake in Mahindra Rural Housing Finance Ltd (MRHFL), which is now a wholly owned subsidiary of Mahindra & Mahindra Financial Services Ltd.

A subscription agreement for this partnership has been signed. Under this, NHB would participate in the first two years’ of capital raising programme of MRHFL.

Mr S. Sridhar, Chairman and Managing Director of NHB, said that NHB has agreed to bring in Rs 5.8 crore towards its share of capital for this rural housing finance venture.

“We have prepared a programme of equity participation in rural housing finance companies. Our intention is to take a small equity stake in such companies, be associated with the overall policy making of the company. We will never go beyond 26 per cent. After sometime, we will exit so that we can use those funds for further promoting rural housing finance,” Mr Sridhar told a press conference here on Tuesday.

He highlighted that NHB was undertaking a promotional and catalytic role along with a financial elemenMr Sridhar said that NHB was looking to make equity investment in one more rural housing finance company, but declined to name the company.

Mahindra Rural Housing Finance officials said that the company would initially target customers of Mahindra Financial Services. A pilot project has already started in Maharashtra and Gujarat.

“Our vision is to be perceived as a one-stop-shop for all the financial needs of the rural customer. There is large opportunity present in this market,” said Mr Uday Phadke, Vice-Chairman, Mahindra & Mahindra Financial Services.

More Stories on : Alliances & Joint Ventures | Housing Finance

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