What is Credit Risk Guarantee Fund ?
It is home loans given to the poor and has an initial corpus of Rs.1000 crores
Did we have anything similar to this before ?
Yes. We had Interest Subsidy Scheme for Housing the Urban Poor which was not successful as expected.
Why do we need Credit Risk Guarantee Fund?
Banks do not consider those with lower than 2 lakhs annual income for giving loans since they are risky.Hence the government assures the banks that Credit Risk Guarantee Fund will cover the risk in case of default
Any drawbacks ?
It does not apply to loans that exceed 5 lakhs but in urban areas it is not easy to build a house with such low expenditures
Possible Solution ?
National Urban Housing and Habitat Policy (2007) recommendation to reserve 15 per cent of developed land in all housing colonies for low-income housing can be implemented.
It is home loans given to the poor and has an initial corpus of Rs.1000 crores
Did we have anything similar to this before ?
Yes. We had Interest Subsidy Scheme for Housing the Urban Poor which was not successful as expected.
Why do we need Credit Risk Guarantee Fund?
Banks do not consider those with lower than 2 lakhs annual income for giving loans since they are risky.Hence the government assures the banks that Credit Risk Guarantee Fund will cover the risk in case of default
Any drawbacks ?
It does not apply to loans that exceed 5 lakhs but in urban areas it is not easy to build a house with such low expenditures
Possible Solution ?
National Urban Housing and Habitat Policy (2007) recommendation to reserve 15 per cent of developed land in all housing colonies for low-income housing can be implemented.
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