Mumbai-based Dewan Housing Finance Corporation in association with International Finance Corporation (member of the World Bank) has launched a housing finance company with focus on people having an annual income of Rs 60,000-2,40,000.

IFC has put in Rs 20 crore for 20 per cent equity stake in the newly formed Aadhar Housing Finance. Dewan Housing will plough in Rs 50 crore, while DHFL Vysya Housing Finance Corporation will bring in Rs 30 crore.

The first branch of Aadhar has been opened at Lucknow, and operations in States such as Madhya Pradesh, Jharkhand, Orissa, Chhattisgarh and Bihar will follow. About 20 offices will be opened by 2012 to serve 60 locations.

The company will provide loans up to Rs 6 lakh. It will offer home loans, home improvement, plot loans, self-construction loans. Plans are to gradually extend products such as mortgage loan, lease-rental finance and non-residential property loans. Aadhar will also refinance project loans essentially for development of low-cost housing.

The floating interest rates will be between 11.5 per cent and 13.5 per cent, and customer equity sought will be about 20 per cent, said Mr Harshil Mehta, CEO, Aadhar Housing Finance.

He said 29 per cent of the population fall in this low-income category, which may be either employed or self-employed. Agreeing that they had access to bank funding, he said it was not a top priority for the banking sector.

Mr Mehta said it had been seen that the need for such loans was for one bedroom-hall-kitchen homes of 450- 600 sq. ft. Aadhar would also co-ordinate with developers of affordable home projects, where the unit cost was in the Rs 6-lakh range.

Conceding that there were challenges in lending to the low-income group, he said they could be overcome.

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