Reverse mortgage mart to triple to $113 bn by 2015: Study

NEW
DELHI: The marketplace for contrary mortgage services, under which senior citizens can
pledge their place for a steady income, will have got a possible of $113 billion
in Republic Of India by 2015, nearly ternary of the about $39 billion now, a study says. The contrary mortgage market
potential, calculated by the figure of senior citizens, set up that the
current marketplace size for the merchandise is three million families and would grow
to six million by 2015, said a study by planetary consultancy house Celent. "The place equity available is
$39 billion and is expected to turn to $113 billion by 2015, which would be a
significant chance for lenders," the study titled 'Reverse Mortgage
Market: Early Days for India' said. The contrary mortgage marketplace is
expected to turn owing to the rapid growing in the senior citizen population,
driven by less birthrate rates, improved healthcare and better nutrition. The Indian authorities is now
employing advanced schemes towards alteration and it have begun introducing
financial instruments aimed at the senior population. In the Budget proposals for
2008-09, the finance curate announced that the contrary mortgage would not
amount to shift and the watercourse of gross received by the senior citizen
would not be income. According
to the report, the senior citizen population is estimated to go 117 million
by 2015, growing from the current 87 million. "There is great potentiality for
this market, but it necessitates the edifice of an ecosystem that would do the
product more feasible for loaners in an Indian context," Celent analyst and author
of the study Ravi Nawal said. There is an expansive distance
that demands to be covered by regulating establishments and loaners before this
sector do any important headroom in India, Nawal added. Highlighting that the living
arrangement among senior citizens bespeaks a ample marketplace chance for
this product, the study said that 80 per cent of senior citizens in Republic Of India live
with their children, while lone around 15 per cent of senior citizens live
either alone or just with their spouse. This 15 per cent is expected
to turn to 25 per cent by 2015, it added. However, the legality of title
ownership impacts the mark marketplace and it is estimated that lone 60 per cent of
all families in Republic Of India have got clear ownership. The study also pointed out
that the loaners would necessitate a batch of work to attain the needed volumes through
their statistical distribution channels and would necessitate strategical concern planning that
considers the profitableness of the RML. As the geographical spreading of
the senior citizen population connotes statistical distribution and attain challenges for
lenders. About 80 per cent of
the senior citizen population in Republic Of India is distribute across 550,000 villages, while
the remaining 20 per cent are distributed across more than than 200 metropolises and
towns.