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Few would argue that the microcredit revolution begun by Bengali Nobel Peace Prize laureate Muhammed Yunus has drastically improved the lives of millions of poor people. But in India, a lack of decent housing and growth in the lower and middle classes have created a unique crisis that entails a different kind of revolution.
Dewan Housing Finance Corporation Ltd. (DHFL), the first institution of its kind in this country, has taken on the daunting task of providing housing loans to people who have been considered as risky borrowers by traditional lending institutions.
In today's India, lower- and middle-income families occupy a financial no man's land, above the maximum income levels set by Microcredit institutions yet unable to meet the minimum financial requirements of the formal credit institutions.
For these Indians, a house is the most important purchase of their lives. About 40 percent of all households are single-room spaces and nearly 50 percent live in nonpermanent structures. In rapidly growing cities, only 65 percent of families own their own house, which constitutes a major concern that will increase as India's population continues to swell and urbanize.
Meeting the needs of this ever-increasing segment of the population will require massive intervention from government and the private sector. Currently, DHFL is the only private institution focused on this wide swath of the population and is committed to its founder's original mission: to provide homes to those who cannot afford it otherwise.
Building relationships with these average Indians is at the heart of what DHFL does. Understanding that, it finances the future of a country and is thus intimately involved in the welfare of India's burgeoning lower- and-middle- class families. It has institutionalized a system based on empathy and customer service unlike anything currently in place in this country.
With everybody in the company, including CEO Bikrum Sen, embodying the famous Japanese commercial mantra ``the customer is God,'' DHFL is focused on redefining the client-lender relationship in a country where commercial culture is still in its nascent stages.
Every employee in DHFL's 170 business locations across the country is obliged to become personally involved in their respective communities
This hands-on personal approach has not only made possible the dreams of thousands of aspiring Indians but has yielded high profits. It has posted a compounded annual growth rate of more than 25 percent over the last five years.
As DHFL expands into Dubai, this lending model will likely find home in other countries as well.
Meanwhile, lending to high-risk clients carries on with much confidence. As one Indian proverb goes: ``You can trust a hardworking poor man with your life savings.''
www.dhfl.com |