27
Given the large investment is needed for house construction, people have to mostly rely on friends and
relatives or moneylenders for fund mobilization as they have little or no access to institutional finance.
One of the reasons for the lack of penetration of formal finances (housing and non-housing) in rural
areas is the high operational cost per loan in rural areas and the other is that formal institutions perceive
the credit worthiness of the borrowers in rural areas as a significant risk (because of lack of collateral and
seasonality attached to their income).
Therefore, if the rural lending market has to be developed further the following characteristics of the
rural market need to be integrated into the formulation of the lending strategy.
• The level of income of the borrowers, particularly agriculturists, fluctuates due to vagaries of nature.
• Lending institutions are not able to assess the income of the rural borrowers.
• Non-availability of tangible securities for housing loans and enforcement of securities in rural areas.
• Non-availability of title deeds.
• High cost of stamp duty towards creation of simple mortgage.
The policy initiatives by the government over the years have attempted to stimulate rural housing in a
number of ways. The policies have been addressing the known handicaps undermining rural housing,
specifically the inability of economically backward sections of the population in accessing various
components of housing. But still a lot needs to be done. Given the multi dimensional existingchallenges
before rural housing, a coordinated strategy needs to be evolved.
Recognizing the importance of housing and road infrastructure, the government in its budget has
announced various schemes to improve rural infrastructure, namely Housing for All by 2022 and
Pradhan Mantri Gram Sadak Yojana (to connect the rural India by roads by 2019) respectively. Besides
there is a clear plan to provide electricity to every village by 2018.Apart from this, the construction
of toilets is a major focal area for the Swachh Bharat programme, which aims to make India “open
defecation-free” by 2019. To improve the quality of life of rural women, government has also promised
to provide BPL women with free LPG cylinders (UJWALA scheme).
Major Recommendations:
Government shouldmake sure that they are implemented and executed on time. Also, government needs
to make an effort to create awareness among people about the health hazards related to open defecation
and use of chullas. Because still there are many people who prefer continuing old practices and social
norms.There are many people who are not even aware of various government schemes launched by
government for their welfare. The government should make an effort to increase awareness among poor
households about recently launched schemes.
-------------------------------------------------------------------------------------------------------------------------
