LIC Housing Finance Limited (LICHFL) has recently tied up with India Mortgage Guarantee Corporation (IMGC) to offer a home loan scheme, under which repayments towards the loan can be made until the borrower attains 75 years of age.
Under this partnership, India Mortgage Guarantee Corporation will provide mortgage guarantee to LICHFL. Thus, any losses that LICHFL may incur due to defaults in loan repayments will be compensated by IMGC.
This partnership will enable LICHFL to provide home loans to more individuals and to increase its market penetration. Further, the company will also be able to improve its current eligibility criteria, ease restrictions for applications, and extend the repayment period.
Mr. Vinay Sah, the Managing Director and Chief Executive Officer of LICHFL, said the partnership between the two firms would allow LICHFL to include more categories of borrowers and to mitigate the risk across various lending categories. He added that through the partnership, LICHFL will be able to provide loans to individuals who are employed with MSMEs, SMEs, and small entities and to self-employed individuals.
Mr. Mahesh Mishra, the Chief Executive Officer of IMGC, said that both companies have started to work closely to design products that are customised and aligned to the end users of LICHFL. With IMGC’s mortgage guarantee, LICHFL will be able to offer home loans for which borrowers will be able to make repayments up to the age of 75 years.
India Mortgage Guarantee Corporation is a privately-held firm that was formed in a joint venture between Genworth Inc., National Housing Bank, Asian Development Bank, and the International Finance Corporation.
Sources: Business Today, The Times of India