A

Project Report On
“An Analysis of Housing Finance patterns in rural
development in Surat district”

Undertaken At
“SRG HOUSING FINANCE”

B. V. Patel Institute of Management

Uka Tarsadia University

In partial fulfilment of the requirement the

award of the degree of
Bachelor of Business Administration (BBA)

Under the Guidance of

Dr. Vivek Ayre
Prepared by:
Shubham Yogendra Yadav
202103100310144
BBA (Semester-VI)
Academic Year
2024-2025

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INSTITUTE CERTIFICATE

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COMPANY CERTIFICATE

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 Acknowledgement

I am greatly thankful to Bhulabhai Vanmalibhai Patel Institute of

Management, for giving me an opportunity to work on “An
Analysis of Housing Finance patterns in rural development
in Surat district” among households in Surat - district” project
at SRG HOUSING FINANCE LTD.

I wish to express my sincere thanks to Dr. Vijay Gondaliya, I/c

Director of Bhulabhai Vanmalibhai Patel Institute of
Management, Uka Tarsadia University.
I wish to express my heartfelt gratitude to my internal guide Mr.
Vivek Ayre and company guide Mr. Milap PravinBhai
Mendapara the Cluster Manager of SRG from whose constant
help and support at all stages of this project has enabled me to
complete it.
Last but not least, I thank all those who have helped me directly
or indirectly during the course of this project.
Shubham Yogendra Yadav
202103100310144

Declaration

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I, declare that the project entitled on ““An Analysis of Housing Finance
patterns in rural development in Surat district” submitted by Me for
the degree of Bachelor of Business Administration is the record of Work
carried out has been taken undertaken as A part of 6th semester of
Bachelor of Business Administration (BBA) syllabus of UKA Tarsadia
University, Bardoli. I declare that this report has not been submitted to
any other university or Institute for any other purpose under the guidance
of Mr. Vivek Ayre.
I further declare that, to the best of our knowledge, the current project
does Not infringe upon anyone’s copyright nor violate any proprietary
rights and That any ideas, techniques, quotations or any other material
from the work Of other people included in this project, published or
otherwise, are fully Acknowledged in accordance with the standard
referencing practices. If I Am found guilty of copying from any other
report or published information And showing as my original work, I
understand that I shall be liable and Punishable by the university, which
may include Failing me in examination Or any other punishment that
university may deem fit.

Date

Place :- Uka Tarsadia University

Shubham Yogendra Yadav

Signature of student

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Executive Summary

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 Index

Sr.No. Topics Included Page No.

Acknowledgement

Declaration

Executive Summary

1. Information About Topic and company

2. Literature Review

3. Research Methodology

4. Data Analysis, Interpretation and Interference

5. Findings

6.
Conclusions

7. Bibliography

8. Appendix

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LIST OF TABLES

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 Chapter – 1
ABOUT THE TOPIC & COMPANY INFORMATION

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About The Topic
 What is Housing Finance?

 Housing finance refers to the financial services and products that help
individuals or organizations obtain the funds necessary for housing-
related purposes. This typically includes purchasing, constructing,
improving, or renovating residential properties.
 It involves borrowing money from financial institutions, such as banks,
housing finance companies, or government-backed programs, and
repaying it over a specified period, usually with interest. Housing
finance enables individuals to access affordable housing by spreading
the cost of ownership or improvements over manageable instalments.

 Key Aspects of Housing Finance

 Home Loans: These are loans specifically designed for purchasing a

new home or property. They typically have long repayment terms and
are secured by the property itself.
 Construction Loans: These loans are provided for the construction of a
new home. The funds are usually disbursed in phases as the
construction progresses.
 Home Improvement Loans: These loans are used to finance repairs,
renovations, or upgrades to an existing property.
 Bank Transfer: This involves replacing an existing home loan with a
new one, often to take advantage of lower interest rates or better terms.
 Bridge Loans: Short-term loans used to bridge the gap between the
purchase of a new home and the sale of the old one.

 Benefits of Housing Finance

 Access to Funds: Enables individuals to purchase homes without

needing the full amount upfront.
 Affordability: Allows for manageable monthly payments over an
extended period.
 Tax Benefits: In many countries, borrowers can avail of tax deductions
on interest payments.

 Housing Finance Institutions

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  Banks: Both public and private sector banks offer various housing
finance products.
 Housing Finance Companies (HFCs): Specialized institutions that
focus on providing home loans.
 Government Schemes: Various government programs and subsidies to
promote affordable housing.

 What are the Housing Finance patterns in rural development?

 Housing finance patterns in rural development refer to the various

financial mechanisms and schemes designed to support the
construction, improvement, and maintenance of housing in rural areas.
These patterns are crucial for ensuring that rural populations have
access to safe, affordable, and adequate housing. Here are some key
aspects:

 Key Aspects of Housing Finance in Rural Development

 Government Schemes: Various government programs aim to provide

housing finance to rural areas. For example, in India, schemes like the
Pradhan Mantri Awas Yojana-Gramin (PMAY-G) and Rural Housing
Schemes under the Integrated Rural Development Programme (IRDP)
and Jawahar Rozgar Yojana (JRY) provide financial assistance for
constructing pucca houses.
 Formal Financial Institutions: Banks, Regional Rural Banks (RRBs),
Cooperative Banks, and Housing Finance Companies (HFCs) offer
loans for rural housing. These institutions provide long-term loans with
favourable terms to make housing more affordable for rural families.
 Informal Financing: In many rural areas, informal financing methods
such as borrowing from friends and family, liquidating personal assets,
or using agricultural property as collateral are common. These methods
are often used when formal financial services are not accessible.
 Infrastructure Development: Housing finance is often linked with
infrastructure development projects. For instance, the construction of
roads, water supply systems, and sanitation facilities is integrated with
housing projects to improve the overall living conditions in rural areas.

 Affordable Housing Projects: Housing finance companies and

government initiatives collaborate to develop affordable housing
projects in rural and semi-urban areas. These projects aim to make
homeownership more accessible to the rural population.

ABOUT THE COMPANY

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 SRG Housing Finance Limited, established in 1999, is a prominent housing
finance company in India, focusing on providing affordable housing solutions
to underserved rural and semi-urban populations in central and western
regions of the country. The company offers a range of financial products,
including individual home loans, loans against property, and builder/project
loans, catering to the diverse needs of aspiring homeowners.

1. Key Milestones:

 1999: Incorporated as Vitalise Finlease Private Limited.

 2002: Became the first company in Rajasthan to receive registration
from the National Housing Bank (NHB).
 2004: Converted into a public company, adopting the name SRG
Housing Finance Limited.
 2012: Listed on the BSE SME platform, marking a significant
achievement in its growth trajectory.
 2015: Migrated to the BSE Main Board, becoming the first company in
India to make this transition.
 2023: Listed on the National Stock Exchange (NSE) on August 21,
further expanding its market presence.

2. Financial Performance:

As of the fiscal year ending March 31, 2024, SRG Housing Finance reported a
total revenue of ₹124.79 crore, reflecting a substantial growth from ₹91.39
crore in the previous fiscal year. The net profit for the same period stood at
₹21 crore, indicating a year-over-year increase of 23.5%.

3. Operational Highlights:

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  Customer Base: Serving over 14,000+ customers, emphasizing its
commitment to affordable housing.
 Employee Strength: Employs more than 800+ professionals dedicated
to delivering quality financial services.
 Branch Network: Operates a network of over 60+ branches, primarily
in central and western India, facilitating widespread access to its
services.

4. Corporate Governance:

SRG Housing Finance adheres to robust corporate governance practices,

ensuring transparency and accountability in its operations. The company is
committed to ethical business conduct and compliance with regulatory
standards, fostering trust among stakeholders.

5. Contact Information:

 Head Office :- 12, SRG House, Opp Paras Health

Hospital, Shobhagpura, Udaipur
 Registered Office :- 321 S.M. Lodha Complex, Near Shastri Circle,
Udaipur - 313001 Rajasthan, India.
 Corporate Office:- 307, 3rd Floor, Hubtown Solaris Telli Gulli, N.S.
Phadke Marg, Andheri (E), Mumbai - 400069, Maharashtra, India.
 Phone: +91 1800 1212 399
 Website: [www.srghousing.com](https://www.srghousing.com/)

6. VISION

“Enabling Housing for all”

7. MISSION

To provide housing loans to individuals in the unserved and under-served,

rural and semi-urban areas of India.

8. VALUES

Our mantra for success is customer delight, by delivering quality services and
to go further and achieve outstanding value and performance for all our
customers and stakeholders.

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 9. Product Offerings:

 Individual Home Loans: Financing for home construction, purchase,

renovation, and extension, tailored to individual needs.
 Loans Against Property: Enables customers to leverage their property
assets to meet financial requirements.

TAGLINE:- “हम दिल में घर बनाते

है”

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 BOARD OF DIRECTOR

Board Memeber Board Memeber Board Memeber Board Memeber Board Memeber Board Memeber

Mrs. SeemaJain Mr.Ashok Mr. Vikas Mr. Nishant Ms.Garima Soni

MR. Vinod Gupta Non - Badala Non- Non-
K. Jain NonIndependen Kabra Non-
Executive, Executive,In Executive, executive,Non
Managing t ,Non Executive dependent Independt Independent
Director Independent
Director Director Director Director Director

MANAGEMENT TEAM

Mr. Ashok Mr. Archis Mr. Vipin

Mr. Vivek Mr. Mr. Ashish
Modi Jain Ms. Divya Saxena
Sharma Abhishek Kothari
Kothari Vice -
Chief Chief Head - Surana Cheif
Financial Executive Company President -
Human AVP - Manager
Secretary Business
Officer Officer Resources Credit Operations
Operations

Awards and Recognition

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 Best Housing Finance company 25th October 2021

 Best Cloud Initiative 20th August 2021

 Business leader April 2021

 Excellence in rural April 2021

 Business leader (BSFI) - 17th February 2021

 Excellence in home Loan - February 2020

 Leading Housing Finance Company - 22nd November 2019

 Best Housing Finance company - 14th February 2019

 Finance company of the year

 Excellence award - 25th May 2018

 Top 100 - SMEs in India 10th March 2018

 Fastest growing finance company - 14tg February 2018

 100 top most influential BFSI leader

 Top 100 SMEs in India 17th 18th March 2017

 Top three performers 2012-13

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 Chapter – 2
Review of Literature

TOPIC :- An Analysis of Housing Finance patterns in rural development in Surat

district, Assessing Loan Accessibility, Borrowers Demographics, Impact on rural

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village growth, Findings suitable borrowers, Borrowers income eligibility,
Calculations of income vs EMI

LITERATURE REVIEW

1. Lall Vinay (1984) in Article entitled “Housing Credit Situation in Eighties”

He has focused attention upon „formal factor‟ (Permanent Construction)
which served mainly to the HIG and MIG, the loan meets only 47% of the
price of the house, forcing the borrowers to make very large down payments.
Also the price of a typical house was above 3 times the annual families‟
income of the borrowers. In spite of, the entire system of housing allocation
and credit the supply of affordable funds was much smaller than demand.
Thus, large growth in urban population and the historically low priority given
to housing, supply falls very short of demand and need.

2. Joshua Rosner (2001) The Research Study entitled “Housing in the New
Millennium: A Home Without Equity is Just a Rental with Debt” He studied
the prospects of the U.S. housing / mortgage sector over the next several years.
Based on his analysis, he believes that, there are elements in place for the
housing sector to continue to experience growth well above GDP. However, he
believes that there are risks that can materially distort the growth prospects of
the sector. Specifically, it appears that a large portion of the housing sector‟s
growth in the 1990‟s came from the easing of the credit underwriting process.

3. Jaco Melissa B. (2002) opined “Home Ownership Risk beyond a Subprime

Crisis: The Role of Delinquency Management “She concluded that public
investment in and promotion of homeownership and the home mortgage
market often relies on three justifications to supplement shelter goals: to build
household wealth and economic self-sufficiency, to generate positive social
psychological states, and to develop stable neighborhoods and communities.
Home ownership and mortgage obligations do not inherently further these
objectives, however and sometimes undermine them. The most visible triggers
of the recent surge in subprime delinquency have produced calls for
emergency foreclosure avoidance interventions (as well as front-end
regulatory fixes). Whatever their merit, she contend that a system of mortgage
delinquency management should be an enduring component of housing policy.
Furtherance of housing and household policy objectives hinges in part. On the
conditions under which homeownership is obtained, maintained, leveraged,
and in some situations exited.

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4. M. Mahadeva (2004). In his article “Housing Problem and Public Action:
Continued Incompatibility Experience from a South Indian State” stated the
nature and distribution of the housing problem in Karnataka and examined
how the state has addressed this issue. In particular, it considers the strategies
adopted during the 90s and identifies a number of failures including the task
force on housing. Some of the major weaknesses, pertaining to incidence by
type and by rural-urban areas, on approaches, on financial requirements and
issue of development and redevelopment are examined to propose alternative
policy strategies to effectively address the housing problem in the state.

5. Rao K. N.et.al. (2005) A Paper entitled “Retail Banking – Emerging Issue in

Home Loan” In this paper the authors revealed that during 2002-03 housing
loans by banks grew at a hefty growth rate of more than 100%. The factors
that contributed to this aggressive growth in the portfolio of housing loans of
banks and HFC are: Tax intensives on repayment of principal and interest,
rising income level of middle class, falling interest rate, stable real estate
prices, easy availability of housing loans, low returns on the investment
opportunities available in the market.

6. Phogat M. (2006) A Research Article entitled “Housing Loan Frauds in

Banks: Some Precautionary Measures” this article gives the measures for the
housing loan frauds in banks. The author concluded that housing for all
envisaged 2 million houses every year out of which 0.7 million are in the
urban sector. Government provided certain relief under Income Tax Act. It
motivated many people to avail housing loan. The author thinks that different
frauds committed on various banks can be divided into the following two
categories. i.e. Pre sanction and Post Sanction. KYC related due weakness in
pre inspection, Benami A/c, forged title deeds, by selling same flat to different
people, inflated salary certificate, filing of IT return for the last three years in
one lot and particularly by paying a nominal amount of tax, valuation of the
property is manipulated to manage margin money are post sanction fraud.

7. Rao K.N. (2006) “Housing Finance – A Global Perspective” According to

Rao, housing finance is a long term proposition involving many risks for the
lenders, borrowers and even for the economy in general. The author mentions
in this article that home loans have been registering exponential growth in
India during the last six years. Easy liquidity conditions, low interest rates,
availability of tax shelters on repayment of principal and interest surging
demand from middle income group borrowers, lower regulatory capital, the
comfort of tangible security have all collectivity contributed to the spurt in
home loans. HDFC, ICICI and SBI are the major players in disbursement of
home loans.

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8. “Housing Finance in India A Case Study of LIC Housing Finance Limited” by
Singh Fulbag et.al. (2006) in this paper, the authors have studied the housing
finance in India. Housing, as one of the three basic needs of life, always
remains on the top priority of any person, economy, government and society at
large. In India, majority of the population lives in slums and shabby shelters in
rural areas. From the last decade, the Government of India has been
continuously trying to strengthen the housing sector by introducing various
housing loan schemes for rural and urban population.

9. Padhi Manohar (2007) “Housing Loan Frauds: Are they Avoidable?” this
article addressed the key issues of housing loan frauds. Aggressive growth in
housing finance by the banks is for the reasons of Tax incentives on repayment
of principal and interest, rising income level of the middle class, affordable
interest rate, completion amongst banks and housing finance institutions, low
returns on other investments, low incidence of NPA, and housing as priority
sector lending for banks. Housing loans as a percentage of GDP, is 57% in
UK, 54% in USA and it is only 2.5% in India. It shows vast scope for housing
loans in India. Increased focus of banks in housing finance is also not free
from fraud. Fraud is one of the reasons for turning the housing loan account to
NPA. The main reasons for housing loan turning NPA are loss of job.

10. “Reverse Mortgage - A Novel Financial Product for Elderly People” by

Bhattacharjee K. (2007) A reverse mortgage is a home equity loan offered to
senior citizens that permits them to convert home equity into cash while they
retain ownership. A reverse mortgage works like a traditional mortgage loan,
only in reverse direction. A borrower does not make regular payments to a
lender; instead he/she receives payments from the lender. The first reverse
mortgage loan launched by Dewan housing in 2006. Reverse mortgage
product name was “Saksham”. Then ICICI and NHB launched a new product
of reverse mortgage. Reverse mortgage can provide a valuable income source
for seniors who own property but lack liquid assets.

11. Vimala P. (2007) A Research Study entitled “Housing Advances and

Commercial Banks: A Review” Authored The objectives of the study were: 1)
To review the housing advances of commercial banks in Kerala. 2) To
compare the performance of different bank groups in respect of housing
advances. The study covered a period of seven years from March 2000 to
March 2006 and the secondary data are used in the study. For the purpose of
the study, commercial banks are grouped into four categories. The study
revealed that there is no significant difference in the growth rate of housing
advances by different bank groups in state. Kruskal Wallis (H-Test) was
applied to arrive at this conclusion.

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12. Bagchi S. (2008) “Risk in Real Estate Financing” Authored The author has
analyzed the factors affecting risk and suggests that real estate financing will
be the order of the day in a new age bank / Institution lending in the interest of
the development of the country. Real estate financing is no longer
“untouchable” as it used to be before 1990‟s. It is also a fact that this sector
contains a higher order risk of “default” and lower order scope of eventual
recovery since the fate of real estate is interwoven with macro-economic
fundamentals and volatility of asset prices.

13. Rajasekhar D. et.al. (2008) “ Housing Finance Problems and Prospects”

Authored The objective of the study was to analyze the trend in the growth
and structure of LICHFL in Chennai city and to evaluate the relative
performance of LICHFL in providing housing loans in Chennai city. One
hundred respondents have been selected on the basis of random sampling
technique. Researcher used conventional statistical tools like percentage and
average for analyzing perception of the borrowers about the LICHFL. Linkert
scaling test was used. The study revealed that in Chennai, 34% of the
respondents have reported that the institution provides loan at low rate of
interest, 33% have reported easy installments, 31% reported that they
approached for simple procedure and formalities and only a negligible 2% of
the respondent represents located near to their house.

14. Chaubey M. (2009) “Housing Finance in India – Problems and Prospects”

Authored the study reveals that,
 42%, 32%, 22% and 4%, opted for loans because of low
interest rate, easy installment scheme, simple procedure and
other reasons respectively.
 26%, 34%, 38%, and 2% respondents have borrowed loans for
purchase of flats, purchase of house, construction of house and
other reasons respectively.
 100% respondents made the repayment in equated monthly
installments.
 43% respondents knew about the interest rate.
 92% respondents preferred floating interest rates and 8%
respondent preferred fixed interest rates.
 72%, 18% and 10% respondents came to know about bank
through print and electronic media, friends and relatives and
Builders/Developers respectively.

15. Vetrivel T, (2010) “A Study on Customers Preference and Satisfaction of Four

Basic Banking Services in Coimbatore and Erode” Authored -As far as overall
satisfaction is concerned out of the 172 bank loan customers i.e. 50% of

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 customers were satisfied and the remaining 50% dissatisfied due to poor
services, penalties for late payment, fear of threats, interest rate confusion,
hidden cost, unknown deduction etc. - Overall satisfaction on bank deposit
schemes resulted positively. - Banking insurance services still need to be given
attention by focusing on customer issues. The study reveals that new
innovative schemes, strategies to cater to non-users of insurance services have
to be adopted, in value-added services. Customer‟s preference for net banking
was least ranked and if the bankers wish to increase net banking traffic.

16. Inderbir kaur, (2013) Purchasing the home of your dreams is not an easy
task. Especially when you plan to buy a home on loan. Home loans means that
you buy a house on installments. In simpler terms when you want to own a
home and cannot afford to pay the amount in lump sum, you can pay it in
monthly installments with an interest rate. There are number of companies
offer cheap loans at a low interest rate You can avail loan against existing
house for renovation or expansion etc. The demand for home loans will not
sag much. The reason is a substantial rise in the income-generating capability
of Indian youth. So this particular section will keep the housing loan demand
high and increased lending rates can only shelve their plans for some time.

17. Nikhita Narendran, (2013) he objective of this thesis is to examine the

differences in residential property prices across different cities in India.
Soaring prices have led to increasingly unaffordable property prices in large
metropolitan cities. As a result, there has been academic discourse about the
existence of a housing bubble in recent years. In the past, empirical research
has focused on national level trends due to a lack of city-level data. I
investigate the city-fixed effects on growth in house prices across fifteen
different cities. Although different empirical models suggest different
conclusions about these effects, point estimates suggest above-normal growth
in house prices in Delhi for the period 2009- 2013.

18. Prabhavathi Y, (2013) The advent of Mutual Funds changed the way the
world invested their money. The start of Mutual Funds gave an opportunity to
the common man to hope of high returns from their investments when
compared to other traditional sources of investment .The main focus of the
study is to understand the attitude, awareness and preferences of mutual fund
investors. Most of the respondents prefer systematic investment plans and got
their source of information primarily from banks and financial advisors.
Investors preferred mutual funds mainly for professional fund management
and better returns and assessed funds mainly through Net Asset Values and
past performance.

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19. Bhartendu Kr. Chaturvedi, (2015) The Indian economy has transformed
authentically over the last two decades. Indian real estate sector is one of the
fastest growing and globally recognized sectors. This sector is the second
largest employer in India after agriculture and is captivating huge investments
especially by attracting Foreign Direct Investments (FDI). The real estate
sector is a critical sector of our economy. It has a huge multiplier effect on the
economy and therefore, is a big driver of economic growth contributing about
8-9% to India‟s GDP. It is not only pioneering the SEZ‟s but the broader
aspects of Special Investments Region (SIR‟s) also. Indian also ranks 3 rd for
most L.E.E.D (Leadership in Energy & Environmental Design) certified space
globally with nearly 12 million sqm. The total market is expected to touch
US$ 118 billion by 2020.

20. Arun Kumar, (2016) Every person in his lifetime dreams to own a property
or a house for safeguarding his family and future. This very idea of providing
secure future to one‟s family has motivated people to invest their hard earned
money into buying land or property. This has lead to the emergence of real
estate boom in busy and highly populated city of Hyderabad. Hyderabad, a
dream land for many, is the fourth largest city in India and capital city of the
newly born state of South India, Telangana and also Andhra Pradesh currently.
With its busy roads, sky touching buildings, IT hubs, wide range of cuisine,
pleasant weather and affordable lifestyle, it has been the mother for many
individuals from different parts of the country. People prefer to stay and settle
down in Hyderabad. With the IT boom, the population migrating to Hyderabad
has further risen up leading to a hike in the real estate market. With the
changing needs of people and the political situations in the state, there have
been highs and lows in the real estate in Hyderabad.

21. Kavitha A, (2016) Good Corporate Governance is important for sound

management of any organization. Non-Banking Financial Institutions like
Housing Finance Companies are no exception and there has been ever
increasing demand for transparency. HFCs are facing more number of
challenges in comparison with commercial banks and concentrate more on
efficiency in order to survive, so there is much importance of sound
management. The main aim of this research paper is to analyze the financial
performance of the listed Five Housing Finance Companies (HFCs) in India,
namely Can Fin Homes, DEWAN Housing finance, PNB Housing finance,
LIC Housing, HDFC, by using the CAMEL model (Capital Adequacy, Asset
Quality, Management Efficiency, Earning Capability and Liquidity).

22. Jonardankoner, (2018) In India, Construction Is The Second Largest Industry

After Agriculture. Construction Output As % Of GDP Is 7.2%. 35 Million
People Which Are 16% Of Working Population In India Work In Construction

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 Industry. There Are About 75 Large Companies And 28000 Organized
Companies In This Sector In India. The Size Of The Indian Real Estate Market
Is Estimated At USD 12 Billion And It Is Currently Growing At Rate Of
About 30% Annually. 2016-17 Had Been The Years Where We Had Seen The
Results Of The Active Government Intervention In Terms Of The
Demonetization, Real Estate Regulatory Act And GST In India. While There
Is Still A Lot More That The Government Can And Claims That It Will Do,
The Fact That Customers Still Need Homes Will Set In. This, Complimented
With Lower Real Estate Rates, Lower Interest Rates And Better Incentives To
Customers To Purchase Homes Will Go A Long Way In Rebuilding The Entire
Real Estate Industry.

23. World Bank (1999) survey for the mid-term review of the poverty alleviation
and microfinance project among 675 micro-credit borrowers in Bangladesh
showed that there had been positive change in the economic and social status
of the surveyed borrowers. The survey showed that income had increased in
the case of 98 percent of borrowers, 89 percent of the borrowers accumulated
new assets and 29 percent had purchased new land either for homestead or for
agriculture. Food intake, clothing and housing had improved for 89, 88 and 75
percent of the borrowers respectively. Sanitation conditions improved for 69
percent and child education for 75 percent of the borrowers. The
improvements had mainly achieved due to the increased level of self-
employment of women participants.

24. Dunn and Arbuckle (2001) studied the impact of micro-credit on the
Mibanco clients in Peru. The impact was measured using cross-sectional data
collected in two parts, once in 1997 and again in 1999. The study
demonstrated a very significant positive impact on its clients in terms of
income and employment generation. It was found that the participation in the
program led to time additional days of employment per month. The authors
further calculated that based on 40,000 Mibanco members at the end of 1999,
17414 full time jobs were created. It was also found that Mibanco clients
earned $266 more per household member per year than the non-participants.

25. Todd (2001) studied the impact of SHARE Microfinance Ltd. on its clients in
Andhra Pardesh, India. The study compared 125 SHARE clients to 104 new
clients who had yet to receive any exposure to the program. All the SHARE
clients had participated in the program for at least three years. Todd created a
poverty index composed of four elements: sources of income, productive
assets, housing quality, and household dependency burden (the number of
household members divided by the number of income earners). This index
score helped him to calculate the extent to which clients had moved out of
poverty. The results of the study showed that 76.8 percent of the total clients
had experienced a reduction in poverty including 38.4 percent who shifted

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 from very poor to moderate poor category and 17.6 percent came out of
poverty.

26. Dasgupta (2001) critically examined the recommendations of RV Gupta

committee (RVGC) and Narasimhan Committee (NCR II) on rural banking
and credit. According to RVGC and NCR II the objective of rural credit was to
achieve anticipated growth rates in agricultural production and employment.
There was substantial unfulfilled demand for crop loan credit which was either
met by the money lender or led to a lower use of input. The above committees
recommended that lender-borrower relationship should be transparent, Loan
documents should be made simple, banks should display their maturity by
ensuring that correct type of people but not the unwanted ones are posted in
rural and difficult areas and stamp duty for agricultural loans should be
abolished.

27. Kamaruzzaman et al. (2001) examined the effect of credit on yield gap and
technical efficiency of Boro Paddy production of Comilla district. The results
indicated that credit receivers achieved higher amount of potential yield than
the credit non-receivers. Mechanical power cost, irrigation cost, application of
urea had positive impact on reducing yield gap while human labour and age
had negative impact on reducing yield gap. Credit also showed positive impact
on increasing technical efficiency. Technical efficiency was higher for credit
receivers than the non-receivers according to tenure status, age, category,
educational status, frequency of extension contracted.

28. The Study by Singh, Verma & Babu (2002) examined the impact of credit
advanced on main crops and milk production enterprises in Soraon block of
Allahabad district of Uttar Pradesh for the period 1999-2000 to 2000-
2001.The borrowings made by farmers helped them in making higher
investments on their farms for different purposes. The study concluded that in
the post-borrowing conditions credit advances made for different purposes had
directly/indirectly resulted in a significant increase in agricultural development
i.e. in the level of income employment on different size groups of farms.

29. Singh and Nasir (2003) observed based on a district wise study in Bihar
during 1980-81 to 1997-97 that agricultural loans increased continuously in
Bihar from Rs. 9806 lakhs in 1980-81 to Rs. 44646 lakhs in 1996-97. The
purchasing power of money had declined tremendously.Moreover the
agricultural credit flow declined in the early nineties which might have
adversely affected the private capital formation on the basis of per hectare
credit flow, agricultural credit flow had been inadequate in Bihar. It may be
concluded that efforts to improve the adoption level of modern crop

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 production technology and expansion of the network of rural institutions
would help in increasing agricultural credit flow in Bihar.

30. Satish (2005) found that in agricultural credit there were two classes of
borrowers. One class which had smaller land holdings, lesser capital
equipment and was at the lower end of economic prosperity. Cooperative
borrower class mainly comprised the small and marginal farmers. The other
class which emerged was basically the capitalist farmer who took up farming
on a commercial basis. This class was more sophisticated having larger land
holdings and higher amounts of capital equipment. The results showed that for
these two types of clientele the approach and system for credit delivery had to
be different. In case of commercial type of clientele, viability of the project,
infrastructural required and marketing arrangements needed to be evaluated
and risk analysis had to be made to finance the project. In case of second type
of clientele, a holistic approach needed to be taken to deliver credit to the
small and marginal farmers who were resource poor and who felt comfortable
in an informal type of environment.

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 OBJECTIVES OF THE STUDY

1. To identify the major sources of housing finance for rural households in Surat
district.
2. To analyse the patterns of housing finance usage among rural households in
Surat district.
3. To examine the factors influencing access to housing finance for rural households
in Surat district.
4. To assess the impact of housing finance on rural development in Surat district.
5. To identify the challenges and constraints faced by rural households in accessing
housing finance in Surat district.
6. To suggest policy recommendations for improving access to housing finance for
rural households in Surat district.

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 CHAPTER-3
Research Methodology

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1. Problem Statement

Housing finance plays a critical role in fostering rural development, as

adequate housing is a fundamental component of socio-economic growth. In
the Surat district, rural areas face unique challenges, including limited access
to formal financial institutions, high dependency on informal lending sources,
and socio-economic disparities that affect affordability and accessibility of
housing finance. These factors can hinder efforts to improve living standards
and spur rural development.

This study seeks to analyze the housing finance patterns in the rural areas of
the Surat district to identify the challenges faced by rural households in
accessing housing finance, the role of financial institutions in supporting rural
housing development, and the effectiveness of existing housing finance
schemes. By examining these factors, the research aims to propose actionable
recommendations for improving the availability and utilization of housing
finance to contribute to sustainable rural development in the region

2. Objectives of

 To identify the major sources of housing finance for rural households in Surat
district.
 To analyse the patterns of housing finance usage among rural households in
Surat district.
 To examine the factors influencing access to housing finance for rural
households in Surat district.
 To assess the impact of housing finance on rural development in Surat
district.
 To identify the challenges and constraints faced by rural households in
accessing housing finance in Surat district.
 To suggest policy recommendations for improving access to housing finance
for rural households in Surat district.

3. Theoretical Frame Work

“An Analysis of Housing Finance patterns in rural development in Surat

district , Assessing Loan Accessibility , Borrowers Demographics , Impact
on rural village growth , Findings suitable borrowers , Borrowers income
eligibility , calculations of income vs EMI”

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 4. Research Design

 For obtaining complete and accurate information, descriptive research is

chosen. Descriptive research includes surveys and fact-findings enquiries of
different kind.

I. Reason for Using Descriptive Research Design:

 Understanding Patterns and Trends: The objective of the study is to analyse

housing finance patterns, including loan accessibility, borrower demographics,
income eligibility, and the impact on rural development. A descriptive research
design allows you to systematically collect and present data to identify trends
and relationships in these areas.

 Clarity and Quantification: Descriptive research is ideal for quantifying

borrower demographics, income levels, loan amounts, and EMI calculations,
providing clear and structured insights.

 Policy Implications: This design helps in documenting and understanding the

role of housing finance in promoting rural development, making it useful for
formulating actionable recommendations.

II. Relevance of Descriptive Research Design to The Study:

 Alignment with Objectives: Since focuses on describing housing finance

accessibility and its impact on rural growth, a descriptive approach is perfectly
suited to achieve this goal.

 Detail-Oriented Analysis: involves examining multiple dimensions, such as

income eligibility, loan accessibility, and EMI-to-income ratios. Descriptive
research ensures comprehensive data collection for an in-depth analysis.

 Practical Applications: The findings can provide a valuable database for

identifying eligible borrowers, understanding barriers to accessibility, and
analysing how housing finance contributes to the growth of villages.

III. How Descriptive Research Design Works in The study:

a) Defining Scope:

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  Focus on rural villages in the Surat district.

 Target variables: borrower demographics, loan eligibility criteria,

income-EMI ratio, and rural development indicators

b) Analysis and Representation:

 Loan Accessibility: Evaluate the proportion of rural borrowers who

meet eligibility criteria and the factors influencing loan approval.
 Borrower Demographics: Create profiles based on income, occupation,
family size, and education level.
 Impact on Rural Growth: Use indicators like improved housing quality,
increased employment, and infrastructure development to assess the
impact of loans on village growth.
 Income vs. EMI: Calculate and compare the income-EMI ratio to
identify patterns and determine the financial strain on borrowers.

5. Data Collection Method:-

a) Primary Data:
 Surveys and structured questionnaires targeting borrowers to
gather data on income, loan amounts, and repayment schedules.
 Interviews with housing finance officers to understand loan
accessibility criteria and challenges.

b) Secondary Data:
 Collect data from housing finance institutions about loan
disbursal patterns, borrower profiles, and repayment rates.
 Review existing reports and case studies on rural housing
finance and its impact on development.

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