In India, the income disparity is continuously growing, and a small section of the country is becoming millionaires as the majority’s economic condition is not improving. Many successful startups are emerging from the government. This results in massive wealth creation and the new generation of founders has entered the country’s wealthy club.
However, when the scope of the economic progress is widened, then much of it remains the same as earlier, and it worsens as the income disparity in the country rises, which results in the shrinkage of the middle-class population and people falling back below the poverty standards.
In this blog, we will understand the scope of mortgage-based lending and how it can provide the scope where one can get the capital with a mortgage and can improve their income either from some business or by investing in some tools that can increase the output of the item they are producing.
The Challenges of the Rural Population
Here, the citizens of the rural people are constantly ignored as the majority of the policies are not targeted towards them, which results in the wide economic divide between the urban and the rural areas of the country.
The urban space becomes crowded as the rural areas dry up in the country, and the lack of support for farming activities makes farmers shift their work to other industries. The DSA partner app allows people from rural and urban centers to get loan products that are suitable from the best lender.
However, suppose the economic gap can be closed. In that case, the population migration will not put an unnecessary burden on the city’s housing market as people can stay distributed and live in several parts of the country.
In India, the population is huge. If the economic interest of the middle class and the below-middle class is not considered, then there is are high chance the society’s fabric will get destroyed, and that can lead to unrest in the country.
Strategies to Be Implemented for Successful Mortgage Lending
Now, mortgage-based loans are the products that can come to a rescue as they bring people from rural areas under the banking system and get financing at lower rates. Here, a person in a rural area can get the financing option which will allow the person to get the loan by mortgaging their home and will provide an economic opportunity to raise the fund and start a venture.
Understanding the Needs of the Rural Customer
When mortgage companies come to rural areas, the first thing that needs to be considered is the needs and necessities of the rural people. For example, before doing mortgage lending, it’s important that one follows the income of the family and makes some special tweaks in the offering so that it becomes easier for the family to pay the loan.
Doing Community Outreach to Get Access
A loan provider must do the outreach work by contacting the local gatherings of the rural community, and there, the banks can run the awareness campaign. For example, the concept of Bharat Mortgages is one of the types where these loans get introduced to the customers for the first time.
Here, a DSA can play the role of reaching rural communities, and the bank can leverage the DSA network to onboard the borrowers who are applying for this loan. DSA’s full form is Direct Selling Agent, and through them, the lenders can become present even in the interior areas without setting up a physical, operational unit.
Offering Flexible Payment Terms for Repayment
These mortgage-backed loans are flexible towards the rural people, and It’s the loan type that is helping the low-income group to leap frog and make their work productive with the infusion of capital.
For example, even in the poor harvesting season, the loans are designed in such a fashion that the farmer gets enough window to make the repayment happen.
Impact of Mortgage Lending in the Rural Area
In the rural population, there will be the creation of economic activity and the people in that area will find the means where they can get the necessities fulfilled. It will not attract people unnecessarily to the cities and will not make one segment of the country a different economy than the others.
These are some of the common factors through which one can introduce mortgage lending in rural areas to bridge the economic gap.
