By IANS,
New Delhi : The National Housing Bank (NHB) has acquired a minority stake in Mahindra Rural Housing Finance (MRHF), a wholly-owned subsidiary of Mahindra and Mahindra Financial Services, a top bank official said here Tuesday.
The 12.5 percent stake acquisition is an attempt to promote rural housing finance, said NHB chairman and managing director S. Sridhar after signing the agreement with Mahindra here.
As per the agreement, NHB will participate in Mahindra’s capital raising programmes for two years.
“We have an objective of strengthening credit for housing finance in rural areas where the demand is highest. This venture will help Mahindra to focus on extending home loans in the rural and semi-urban areas which is in line with NHB’s plans for future,” Sridhar said.
“Once the market is established, we will exit from this agreement and will hold minority stake in another rural housing finance company,” he added.
MRHF chief executive Anuj Mehra said rural finance had immense growth potential, and that his company aimed to spread across the country in the next two to three years. Currently, it has operations in Maharashtra and Gujrat.
So far, the company has disbursed Rs.100 million as loans.
According to research agency Crisil, the housing finance market is expected to be Rs.2,560 billion by 2011, out of which the share of rural housing finance will be Rs.340 billion.