HUDCO offers techno-financial assistance
to public agencies for all types of Housing and Urban/Rural Development
schemes covering almost all aspects of physical and environmental upliftments.
Besides State Agencies, now HUDCO finances NGOs and Private Builders as
well. HUDCO operates a number of Action Plan Schemes of Govt. of India
which have substantial grants upto 100%. The schemes like Night Shelters
for the footpath jewellers, Housing and Shelter Upgradation for the poor,
Building Centres, Low Cost Sanitation etc. come under the Action Plan Schemes,
HUDCO also provides assistance for urban Infrastructure, Land Acquisition
and Social Infrastructure schemes among others. In the recent past HUDCO
has financed large scale Land Acquisition Schemes, Railway Stations, Rail
Lines, Harbours, Prisons, Conversion of Urban Wastes into energy etc. in
many States.
Social objectives of HUDCO
The long-term loan offered by HUDCO
at low rate of interest help the economically disadvantaged people to own
a house and repay gradually while enjoying its benefit. HUDCO fulfils a
social objective by channelising 55% of its funds to EWS and LIG income
categories at highly subsidized rate of interest and 45% to the other income
groups at a slightly high rate of interest. Thus any State availing loan
assistance from HUDCO more for the priority sector, enjoys a lower average
rate of interest.
Annual Statewise Allocations
for Loan Sanction
HUDCO makes income categorywise
fund allocations every year for housing Schemes on the basis of area and
population of each State. 55% EWS (Rural)-15%, EWS (Urban)-20% and LIG-25%)
of the total financial assistance is provided for the benefit of economically
weaker sections and lower income groups. Lower the income group, lower
is the interest rate and higher is the extent of finance. In case a State
fails to avail the fund allocated by HUDCO, the same is diverted to the
other States. Thus, a State may avail loan much its allocation under each
income category.
Thrust on innovations and
self-sustainability
HUDCO strives for innovations, cost
reduction and self-sustainability of each scheme so that an agency does
not get financially sick. HUDCO has promoted a number of Building Centres
in the State in order to ensure cost-effective building material and technology
and skill upgradation. The Building Centre may also under take demonstration
in construction and design counselling in order to facilitate affordable
shelter for the common people. Agencies are likely to get financially stronger
after implementing schemes with HUDCO financial assistance. HUDCO offers
consultancy services in planning and design of all types of Housing and
Urban Infrastructure schemes. It also undertakes demonstration projects.
Mobilisation and delivery
of resources
Traditionally, HUDCO mobilises resources
by borrowing funds from various organisations like LIC. GIC etc. and from
the market by issuing bonds and debentures besides having its own equity
base. The minimum rate of interest for all such borrowings is 13%. Recently,
HUDCO has launched a highly attractive Public Deposit Scheme to mobilise
resources from the household sector.
HUDCO pays dividends as well as income
tax to the government and maintains a competitive rate of interest by offering
loan to EWS at 9% LIG at 12% to 13% MIG at 14.5% to 15% and HIG at 15.5%
rate of interest. This has been possible due to low overhead cost, slim
size of the corporation (well below 800 employees for its all India operation),
totally professional management, hard work and strong commitment to the
objectives.
Salient features of HUDCO
Financial Assistance
HUDCO loan assistance programme covers
every aspects of built environment in both urban and rural area. Each scheme
as enlisted in Annexure-1 has a guideline giving all details of the scheme.
Any Agency seeking HUDCO loan should go through the scheme guideline, loan
application form and the checklist of prerequisites available at the Regional
Office.
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Eligibility prerequisites and actions
A new agency approaching HUDCO for the
first time for techno-financial assistance, shall have to establish its
financial and legal eligibility first. For others, it is necessary to prove
their financial health by submitting annual and the unaudited accounts,
recovery performance etc. to HUDCO while submitting any scheme for loan
sanction. A team of well-trained Executives in all concerned disciplines
are always ready to assist and help the Agency with a development attitude
in all matters related to their schemes.
in order to obtain financial assistance
against a scheme the agencies are required to pay certain service charges.
These are as follows :-
Each loan application sent to HUDCO
must be accompanied with the application fee towards incidental and documentation
charges by way of a Bank Draft which varies from Rs. 5,000/- (for EWS Housing
Scheme) to Rs. 40,000/- (for Urban Infrastructure schemes with loan amount
upto Rs. 20.00. crores)
One time front-end fees on the total
loan amount is levied on all Schemes which varies from 0.5% of the loan
amount (for EWS Housing Scheme) to 1.25% of the loan amount (for all other
schemes except LIG Housing Scheme). The amount of front-end fee is recovered
from 1st loan instalment except in case of Urban Infrastructure Schemes
where the same is deducted in instalments.
A rebate of 0.25% is allowed to the
borrowing agency in the Front-end fee where legal documentation is completed
within the prescribed period of 4 months. Otherwise, the rebate of
0.25% not availed by an agency is transferred to Research & Development
(R&D) account of the Agency which is released as a grant to them for
upgrading the organisational capability and such, other purposes. However,
this grant must be utilised within 3 years.
Interests on loan
HUDCO generally codes gross rate of
interest in all agreements etc. Substantial rebates varying from 0.5% to
2% depending on the type of the scheme are available on this gross rate
of interest on timely repayment of principal, interest and other charges
to HUDCO. In fact any agency may avail this rebate and enjoy the financial
assistance at the net rate of interest.
Net rate of interest charged by HUDCO
for various types of schemes are by far the lowest. If a State avails HUDCO
funds for the disadvantaged income groups, the average rate of interest
may come down even lower. However, in order to get the benefit of low rate
of net interest, an agency has to repay the loan instalments in time as
per the agreed repayment schedule. Otherwise, they will loose the rebate
on the gross rate of interest.
In the event of any default in payment
of principal. Interest etc. the borrower have to pay the principal with
the gross rate of interest and a penal interest @ 2.5% over and above the
normal gross rate of interest on both principal and interest.
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Additional interest on non-utilisation
on fund
In case of non-utilisation of funds
released by HUDCO within a period of 6 months from the date of release,
the Agency will be liable to pay an additional interest @ 3% over and above
the gross interest rate. In case of Action Plan Schemes (NRY SHASU, ILCS,
Night Shelter for Pavement Dwellers), the additional interest rate will
be charged @ 2% when funds are not utilised within 12 months from the date
of release.
Since shelter supports man, family and
their creative and productive works at home level, provision of shelter
should be treated as on infrastructure to production and creation. It is
the single important item towards upgradation of quality of life. The shelter
and the physical fabric are the most important factor in shaping the quality
of life for the individuals, families and communities. Hence, the Housing
and Human Settlement issues are to be addressed by the community as a whole
where the State has the most important role to play as a facilitator. HUDCO
as a State agency has been playing the role of facilitator since 1970 much
before the world was aware about this role of the State. |