Colonial Education, Bureaucracy and a Genius

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An appropriate housing finance system for a developing country like India is not a mere emulation of the finance institutions of the developed world geared towards purchase of a home. Instead, it is necessary to develop a system that addresses the various facets of housing production and upgradation process. In metropolitan areas, large 'accretions to housing stock take place through upgradation of existing dwelling units by petty landlords. With the contemplated changes in the Rent Control Act, it is quite likely that there will be an appreciable increase in such upgradation of housing stock. Studies in low income housing areas have also indicated that the demand for financing such investment is of a different nature. It would require small loan amounts with short to medium repayment periods and a flexible interest and repayment schedules. If the proposed housing finance system includes home upgradation and rehabilitation within its scope, it will be able to serve a much larger proportion of lower and middle income households.