Borrowers Perception of Select Housing Financial Institutions with Reference to Chennai City

Abstract

India is home to over 1.1 billion people. With about one in every sixth person in the world living in India, Housing assumes significant importance .The Government of India has been transforming housing sector into an engine of economic growth through prudent policies and a host of initiatives. It has made the development of the housing sector a priority both from the demand and the supply side by fiscal concessions to the providers of the house and to the borrowers. In India traditionally Provident fund and Gratuity amounts received where the only options for buying a home. The emergence of housing finance as a major business in the country, has increased the prospects for home loans. While the Housing sector has been thronged by the borrowers community, the market has also witnessed change in lending practices in certain segments to accommodate the customer needs. The empirical research on housing market in India is scarce due to the paucity of information. With the objective of filling the void, this thesis contribution is to examine the Borrowers perception in the light of Housing Lenders in the housing finance industry. The Research design adopted is Descriptive research. Non Probability sampling procedure is adopted in the study. Housing Financial institutions are identified and selected based on their Merit and performances. In total only 5 Major (HFI) Financial Institutions and the Sample size was 300 borrowers have been chosen for the study. A Schedule was administered to 80 executives of (HFI) Housing Financial Institutions. The Choice criteria were based on the number of persons taking loans from the major financial Institutions which varied considerably. The study administered questionnaire to the borrowers covering questions pertaining to Demographics, Housing loan parameters . Secondary Data was collected from various Reports, Manuals, Journals and Reports of Housing companies. Statistical tools like Chi square tests, ANOVA t-test, were applied. The study has 75 findings. It is found that interest rate was the deciding factor, followed by the service charges which includes Processing fees. The level of satisfaction is moderate for all factors. The thesis concludes with the recommendations like tapping newer segments of borrowers, single clearance of loan, cross selling, competitive pricing in terms of lower interest rates, tie ups, improving credit delivery mechanism reducing time lag and capitalize on present customers and aggressive marketing through Newspapers, websites, Print Media which will enable the Housing Financial institutions to withstand competition.