ATM :: Single women face discrimination when applying for home loans


By Anita Bhoir, ET Bureau | 11 Jun, 2014, 04.00AM IST | Economic Times

ATM
MUMBAI: Gender discrimination is not a phenomenon that’s restricted to the bad lands of Uttar Pradesh, or Bihar. It is right here in the middle of the metros and that too in banks, some headed by women.

The probability of a bank insisting on a single woman being asked to bring in a co-applicant is a lot higher than a married one, especially if it is a home loan.

Karishma Amin, a 30-year old staffer in an overseas mission, is among the many people who have been running struggling to secure a home loan, but many top lenders turned her away saying that she would not be eligible unless she brings in a co-applicant.

The lenders include ICICI Bank, Axis Bank, Indiabulls Home Finance, and Dewan Housing Finance. At least two other women complained of difficulties in getting a home loan, and checks on banks showed that the practice is prevalent. “They said they won’t be able to process the application without a co-applicant,” says Amin. “Since this was a pre-condition for institutions I made my mother who is a dependant as the coapplicant. I haven’t received a convincing response from these institutions on how a non-earning member, my mother, would help their cause.”

“We do not give home loans to single women borrowers unless they have a co-applicant,” said a culture officer from a private sector bank. “There is no RBI norm, but this is an internal credit check that we follow based on our data analytics where we have noticed that the default rate among single women is high.” Most lenders may not explicitly say that a co-applicant is necessary, but could disguise it saying that it is essential to have a guarantor for loans.

“This mentality comes from the fact that women can’t get good employment options and those who do would not be able to sustain the employment,” says Vijayalakshmi Rao, mentor & advisor at Association for Non Traditional Employment for Women. But what exposes the double-standards is that hardly any working male applicant is asked for such guarantors when the property is mortgaged.

“We do not ask for a co-applicant,” said Rajesh Makkar, president and chief development officer, DHFL. “We request for a guarantor to ensure that there is a contact when the borrower is not contactable. This only helps the institution in case of a default.”

Credit information bureaus which generate credit scores on individual loan applicants do not prepare data on single women separately. Their scores are based on their past performance in terms of repayment of loans. “We do not generate any report based on the gender,” says an executive from CIBIL, a credit information bureau. “If at all there is anything, it may be done at the bank level.”

Many banks and housing finance companies sell home loan and other products to women by giving them an interest rate benefit. However, their staff are not equipped and trained to handle queries by single women.

“Most banks and financial institutions have a policy insisting that a single woman borrower having a co-applicant is to secure the loan,” says a third party sales agent of a private sector bank. “Though the flat is mortgaged with the lender they do not want to face the hassles of repossession. They prefer a co-applicant from whom they can recover.”

As against home mortgages, other loans are not as biased against single women. “Gender is not a criteria for benefit or disadvantage for a car loan pricing at HDFC Bank. However scheme/market-based limited period offers are rolled out for various segments including women from time to time,” Rajan Pental, senior executive VP & business manager, auto loans, HDFC Bank. “Since gender plays no role in our credit assessment any need for a co-applicant in a car loan is to bolster the applicant’s debt-servicing/income profile,” said Pental.

Source : http://goo.gl/iFvqq6

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