‘NHB’s liquidity infusion no balm for small HFCs’

KOLKATA, Aug 3: Liquidity infusion facility bythe NHB would not be of much help to sustain small housingfinance companies (HFCs), an official said on Saturday.In order to boost the affordable housing sector, thegovernment should support small HFCs which have been facingliquidity crunch, Aadhar Housing Finance MD and CEO DeoShankar Tripathi said.

Union Finance Ministry on Friday said the NationalHousing Bank (NHB) was infusing an additional Rs 10,000 crorein NBFCs with a view to improve flow of funds for housingloans.”Based on the 15 per cent of net owned fund (NOF)criterion, the amount available to HFCs having NOF of Rs 50crore or Rs 200 crore will be inadequate.

These smallcompanies cater mostly to informal sector,” Aadhar HousingFinance MD and CEO Deo Shankar Tripathi said.Most of the 100 odd HFCs have NOF between Rs 50 and200 crore and they will get anywhere between Rs 7.5 crore andRs 30 crore based on the 15 per cent of NOF formula, he said.Tripathi, however, applauded the liquidity infusionmove by the NHB.Elaborating the grim situation of lending by HFCs, hesaid only a handful of small HFCs are actively lending atpresent.

He suggested that NHB may consider increasing the NOFcriterion to at least 40-50 per cent keeping the othercriteria same or even reduce the upper limit of 500 crore toRs 400 crore.”Otherwise, this benefit will go to the bigger HFCswhich are less affected by liquidity crunch,” he said.Speaking on Aadhar Housing Finance, Tripathi said itsNOF has jumped to Rs 1,700 crore as on June 2019, compared toRs 865 crore in March 2019 after the takeover by globalinvestment firm Blackstone.In June, Blackstone had announced that private equityfunds managed by it have acquired a 97.7 per cent stake inAadhar Housing Finance. (PTI)