NABARD - Student Internship Scheme 2016-2017 - page 45

iv. Use of concrete in constructing the roof and mosaic/tiles in flooring major drivers which push the
cost up. Further, if these materials are procured from the city there is an even further increase in cost
of construction.
v. Lack of adequate money and shortage of skilled masons adversely affect housing construction in
rural areas.
vi. Lack of cooperation by the officials and staff at lending agencies. There were many households who
had never approached any formal financial institution for a home loan.
vii. Almost all the households were ready to accept composite loan wherein they had to utilize 25% of
the loan amount for ancillary income generating activities. The proportion of households who were
not willing to take the composite loan can be considered negligible
viii.Only 24% households surveyed preferred a monthly repayment schedule. Annual repayment
schedule was preferred by 10%, half-yearly by 16% and 4% wanted quarterly repayment schedule. It
is interesting to note that 46% were unable to make a choice in respect of repayment schedule.
Major Recommendations:
• Interactions with lending agency officials suggest that successful implementation of Direct Finance
scheme greatly depends on timely repayment. Interest subsidy for those borrowers who are regular
with respect to repayment schedule is desirable
• The average cost of construction is Rs. 3,11,357. While, the average cost of construction using durable
construction materials goes up to Rs. 4,36,000. Therefore, the upper limit of the composite loan
component should be kept in the range of Rs. 4-5 lacs.
• None of the officials at lending agencies have reported to have provided any technical advice to the
borrowers with respect to low cost building construction material. It should be noted that banks
employ civil engineers, architects etc. who are in a position to offer such advice. This would reduce
the cost of constructing houses and give rural housing the required boost.
• Although many respondents have shown willingness for taking up non-agricultural employment,
there financial condition is still weak. In this context counseling with respect to subsidiary income
generating activities is highly desirable. BCs/BFs are well suited for such a role.
• A follow up study emphasizing various aspects of demand low building material should be taken up
as this provides an alternative which can reduce cost of construction and make rural housing more
• A study aiming to ascertain the feasibility of alternative credit delivery mechanisms viz. Self Help
Group (SHG), Joint Liability Group (JLG) etc. is also desirable.
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