A Study On Non-Performing Assets Of Housing Finance Companies In India

Abstract

Housing finance sector establishes the foundation of a prosperous nation. The economic
progress of different sectors of an economy has a strong link with its housing finance sector
performance. However, the growing non-performing assets (NPA) of housing finance companies affect
the solvency of the firm and erode the credibility of the sector. In this context the present study aims to
examine the factors causing the non-performing assets and suggest ideas to counter the problem of
NPAs of housing finance companies in India. Unlike the prior studies on the subject, the present study
based on the primary data collected from the housing finance company executives and opinion makers
having elite standing in the society and sound knowledge in housing finance companies to investigate
the role of managers in preventing the rising non-performing assets. In addition to the other reasons, the
findings of the study suggest that improper credit appraisal method, credit monitoring internal system
and the defaulter friendly legal systems are prominent reasons of growing NPAs of housing finance
companies in India. The study suggests that to control the rising NPAs at the company level, the
management should take necessary steps with regard to- the pre and post monitoring of loans, strong
internal control measures and building a robust legal team to take timely legal action.