Time to call for reset

Despite housing being a potentially appreciating asset, delinquencies are inching up in certain pockets.

- reports RAGHU MOHAN

Lenders are targeting the informal self-employed segment where delinquencies are higher," says Mahesh Misra, leading you into a relatively little-known irritant which has the potential to balloon. The managing director (MD) and chief executive officer (CEO) of Indian Mortgage Guarantee Company - the country's sole mortgage guarantee firm - identifies a key pain point: The reluctance to up the loan-to-value to more than 80 per cent even where permissible. It leads to customers sourcing personal loans to bring in their contribution to purchase a home (or furnish it), pushing costs higher. And if this happens to be in affordable housing segment, you are on the road to delinquencies. IMGC plans to offer credit scoring for home loans.

And if you thought know-your-customer (KYC) protocols for those with "thin-files" (poor or little by way of credit histories) can be a delinquency-arrester, think again. According to Joydip Gupta, head (Asia Pacific) at Scienaptic - a provider of AI-powered credit solutions - unlike their urban counterparts, customers in rural areas may lack conventional identity documents such as passports, PAN cards, or drivers' licenses. "While Aadhaar has been a significant enabler for digital KYC, issues arise when biometrics don't register correctly, or discrepancies exist in records."

Lenders are now examining fresh ways to tighten KYC. You may soon see biometric-based portable KYC kits: Equipped with fingerprint scanners and iris-recognition technology, these allow in-person biometric verification in areas with limited digital connectivity. The likes of Scientaptic or IDfy will be more in demand for their services; the latter - an integrated identity verification company - recently raised $27 million in funding from Elev8 Venture Partners, KB Investment, and Tenacity Ventures.