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LESSONS:

India: Private Sector Housing Finance Project (Dewan Housing Finance Corporation Limited) [Loan 2057-IND]

| country: India

The extended annual review report (XARR) highlights the following lessons from the project: (i) mortgage finance for customers in the low- and middle- income (LMI) segment can be commercially viable, but housing finance companies (HFCs) or commercial banks must have highly trained and experienced staff, and sound credit underwriting and portfolio management policies to successfully generate business in this market segment; and (ii) reliance on a government regulator, such as National Housing Bank (NHB), as a major source of funding may not be sustainable over the long term, considering that financing is not its primary function and there is an inherent conflict of interest between the financing and oversight functions. This validation agrees with these lessons.

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