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LIC Housing Finance Ltd is examining the feasibility of introducing a differentiated home loan product to encourage the parents of girl children to own a house. The mortgage lender is envisaging a loan product whereby the girl child gets some shares of the company either free or at a notional value once her parents take a home loan.
India's second biggest housing finance company, which had an outstanding loan portfolio of Rs 58,707 crore as on December-end 2011, aims to kill two birds with one stone through the proposed scheme.
On the one hand, the parents of the girl child are likely to be attracted to the home loan scheme due to the incentive of getting shares in their child's name. On the other, in the context of the burning issue of female infanticide, it will encourage parents to consider the girl child as an asset.
“For example, if a young couple with a girl child gets a loan from LIC Housing Finance then their child will get some shares of the company either gratis or at a notional value.
“When the child turns 18, the shares could be liquidated. This could fetch a substantial amount,” explained Mr V.K. Sharma, Director and Chief Executive, LIC Housing Finance (LICHF).
Drawing from experience
LICHF will draw on the experience of its parent Life Insurance Corporation of India in implementing gender-based affirmative schemes. In this regard, Mr Sharma pointed out that the Karnataka Government is implementing the Bhagyalakshmi Scheme with the help of LIC.
The State Government deposits Rs 10,000 in the girl child's name. The funds are managed by LIC in such a manner that not only does the child receive annual scholarship for studies, but also gets a lump sump amount when she turns 18.
Concern for the girl child
According to policymakers, the concern about the girl-child stems from the fact that the child sex ratio (0-6 years), as per the 2011 census, in the country has declined to 914 girls for every 1,000 boys. This ratio was at 927 girls for every 1,000 boys in the 2001 census.
This fall in the child sex ratio has happened despite a stringent law banning pre-natal sex determination being in place. Societal preference for boys is the main reason for this skewed ratio as female foeticide is rampant in many parts of the country.
Quality housing
Mr Sharma said though there is a huge demand for affordable, quality housing in the country, the supply-side response is woefully lacking.
According to the estimates of the Ministry of Housing and Urban Poverty Alleviation, the housing shortage during the 11{+t}{+h} plan period (2007-2012) has been estimated at 26.53 million units
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