The National Housing Bank (NHB) is all set to buy out 12.5 per cent stake in Mahindra Rural Housing Finance (MRHF). The MRHF happens to be a fully owned subsidiary of the Mahindra and Mahindra Financial Services (MMFS). The two parties, it is heard, have already signed the subscription agreement. 

Mahindra Rural Housing Finance is engaged in giving loans in rural and semi-urban areas for purchasing, repair and building of new homes. Speaking on this issue, Anuj Mehra, the MHRF CEO, said, ‘The loan would be given at a fixed rate of interest, which will be two to three per cent higher than the rates of other comparative banks.’
 

Money will initially be lent out by the finance company to the MMFS’s existing customer base of about million people. MRHF has begun operating from Maharashtra and Gujarat. ‘The current book size is Rs 10 Crore, which means that the company has already provided loans to 550 customers,‘ informed Anuj Mehra.
 

Mr S Sridhar, the CMD of National Housing Bank, said that they will be involved in MRHF’s first two years’ capital raising programmes under this agreement. ‘This participation is just promotional not a catalytic one,’ he underscored.