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Sub-prime borrowers fuel affordable housing boom for lenders, HFCs

While the total disbursement of housing loans by PSBs as well as HFCs witnessed a deceleration in 2016-17, there was significant growth for the lower slabs

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Namrata Acharya Kolkata
While the Reserve Bank of India (RBI) has been cautioning against the pile-up of bad loans in the affordable housing segment, home loans to sub-prime borrowers have emerged as a whole new category in the market.    

According to data from the National Housing Bank (NHB), there are about 91 housing finance companies (HFCs) operating in India currently. Within the past two to three years, close to 15-20 companies have come up with a focus on lending to the informal sector, where borrowers typically don't possess the requisite documents to avail of loans from banks or bigger financial institutions. 

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