Small-Ticket Housing Loans Rise In Tier I and II Cities

Small-ticket affordable housing loans in tier-1 and tier-2 cities and rural areas have seen an uptick, as banks focus on retail loans in these areas to drive credit growth, said people aware of the matter. The government also wants banks to push credit through schemes such as PM Awas Yojana (PMAY). Housing loans, including priority sector loans, grew 6.4% year-on-year in March, according to the latest data.

Most of these loans are secure as they avail government subsidies, in the range of 3-6%. As per 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 houses, nearly 9.29 million have been grounded for construction - 5.44 million of these have been completed and the remaining are under various stages of construction. Under PMAY (Rural), 22.9 million houses have been sanctioned.

The disbursals for PMAY projects were a huge hit especially in cities such as Ujjain, Alwar, Bhiwani, Agra, Sonipat, Ajmer and Bulandshahr