For banks, women are preferred borrowers

At a time when bad loans are becoming a big concern, banks are betting big on women to expand their home loan portfolio.

Many banks are offering women customers home loans at rates lower than that for male customers. Besides, they get to enjoy other discounts such as lower processing fees.

State Bank of India, for instance, has taken a lead in this regard and has for the last couple of months been aggressively promoting the ‘HerGhar’ scheme, which has a catchy slogan — home loans for the ones who make the home.

The interest rate under the scheme stands at 10.10 per cent for women as against 10.15 per cent for others. Other sops include calculation of interest on daily reducing balance and overdraft facility.

SBI Managing Director A Krishna Kumar told Business Line recently that the scheme had elicited “very good” response and has been driving SBI’s home loan growth. LIC Housing Finance Ltd had also reduced interest rates for women by 0.25 percentage points under its Bhagyalakshmi scheme. According to an official, there are other special discounts for women till this month end.

Apart from SBI and LICHFL, banks such as Indian Overseas Bank are also trying to woo women with interest rate cuts irrespective of the tenure and loan amount.

The basic conditions for getting these offers are that the woman should be the sole applicant or first co-applicant of the home loan, and the property proposed to be financed should be either in the sole name of the woman borrower or she should be the first owner in case of joint ownership.

DIFFERENCE The reasons for special focus on women customers are varied. The experience of bankers shows that women are better than men when it comes to repayment. “The repayments are definitely better if the customers are women. This has been well-established not only in housing loans but also in other categories of advances, including those for self-help groups,” CVR Rajendran, Chairman and Managing Director, Andhra Bank, said.

According to Usha Ananthasubramanian, Chairperson and Managing Director of Bharatiya Mahila Bank, one can bank on women because there were “pretty serious” about the repayments and clearing the loan on time.

“Home loans have generally been less prone to impairment and it carries a high degree of emotional value. Besides, women by nature are clear about loan repayment and securing the property as a family asset,” she said.

The lower credit growth and higher non-performing assets in other major sectors, such as corporate/mid-corporate, are driving banks to strengthen their retail lending in a more dependable manner.

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