Case Studies
01
IMGC and the lender institution working in collaboration for the last 4 years. The initial pilot phase was launched in 4 cities which has expanded to 100+ cities at present.
MG Proposition:
- Incremental volume without incremental risk
- The first loss of 20% passed to IMGC
- Borrower paid – risk-based pricing
- Cash flow support on guaranteed loan turning NPA
Benefits Derived
Mortgage guarantee loans comprise over 10% of each location. These loans are incremental volume for the lender institution (approximately INR 250 Cr per month).
The increase in business volumes can be attributed to the following benefits derived from mortgage guarantee products:
- Incremental business from new target segments and geographies
- New builders, channel partners, and DMAs are on-boarded leveraging MG
- Options for credit to approve a loan with additional risk mitigant
- Increase in the approval rates resulting in higher conversion
- Cash flow support on guaranteed loan turning NPA
MG Proposition:
- Grow affordable segment with MG
- The first loss of 20% passed to IMGC
- Borrower paid – risk-based pricing
Benefits Derived
The increase in business volumes can be attributed to the following benefits derived from mortgage guarantee products:
- Incremental business from new target segments and geographies (borrowers)
- New builders, channel partners, and DMAs are on-boarded leveraging mortgage guarantee
- Options for credit teams of lending institutions to approve a loan with additional risk mitigant
- Increase in the approval rates resulting in higher conversion
- Cash flow support on guaranteed loan turning NPA
02
The lender institution is working with IMGC for 1.5 years with a mortgage guarantee policy embedded in their internal product to launch home loans for the affordable segment.
02
The lender institution is working with IMGC for 1.5 years with a mortgage guarantee policy embedded in their internal product to launch home loans for the affordable segment.
MG Proposition:
- Grow affordable segment with MG
- The first loss of 20% passed to IMGC
- Borrower paid – risk-based pricing
Benefits Derived
The increase in business volumes can be attributed to the following benefits derived from mortgage guarantee products:
- Incremental business from new target segments and geographies (borrowers)
- New builders, channel partners, and DMAs are on-boarded leveraging mortgage guarantee
- Options for credit teams of lending institutions to approve a loan with additional risk mitigant
- Increase in the approval rates resulting in higher conversion
- Cash flow support on guaranteed loan turning NPA
03
The lender institution has taken a mortgage guarantee on part of its pool. The pool backed by mortgage guarantee is a riskier pool on account of borrower profile and origination geographies.
The objective of getting the existing book guaranteed was to transfer the risk and cash flow management.
Benefits Derived
- Capital efficiency (risk weight of guaranteed portion reduced to 30%)
- Cash flow management (EMI of NPA accounts to be paid by IMGC)
- Risk transfer (Loss Transfer to the extent of guarantee)
Benefits derived by the housing finance company
- Cash collateral almost halved at the time of transactions
- Additional comfort is given to the Investor
- Cashflow and loss support provided by IMGC
- Improved return on equity on the transactions
Benefits derived by the Investor (large private sector bank)
- Increase in credit enhancement levels
- Reduced dependence on originator as NPA support provided
04
IMGC guaranteed two pools of PTC transactions worth 300 Crores, with the seller being a housing finance company and the investor being a large private sector bank. Two credit rating agencies rated the pool after considering [Reduced cash collateral on account of mortgage guarantee] Vs high cash collateral
04
IMGC guaranteed two pools of PTC transactions worth 300 Crores, with the seller being a housing finance company and the investor being a large private sector bank. Two credit rating agencies rated the pool after considering [Reduced cash collateral on account of mortgage guarantee] Vs high cash collateral
Benefits derived by the housing finance company
- Cash collateral almost halved at the time of transactions
- Additional comfort is given to the Investor
- Cashflow and loss support provided by IMGC
- Improved return on equity on the transactions
Benefits derived by the Investor (large private sector bank)
- Increase in credit enhancement levels
- Reduced dependence on originator as NPA support provided