Freedom From Congestion : The Impact Of Housing Finance

He dropped out of school when he was in the seventh grade. Prakash, 34, is a diminutive young man who regrets leaving school. Nevertheless, having worked his way up, he is now a skilled worker building concrete structures. Although he was satisfied with his occupation and income levels, he still had a major concern – he lives in a congested single room house.

Prakash has two more brothers and none of them managed to complete school. At the tender age of 15 he alongside his elder brother joined a local two-wheeler garage in Gogunda. He earned a measly amount of Rs. 100 per month at the time. He realized that there is no future for him in the two-wheeler repairing business and started working as a construction helper. A neighbour then taught him the art of constructing re-enforced concrete (RCC) structures. This marked his transition to a skilled worker.

Now he did much better, earning around Rs. 400 a day. He got married around this time and his father moved out and bequeathed their single room pakka house to him. He has been living in the same for the last 25 years and is now joined by his wife and three children. During this time he also helped his younger brother strengthen the house and also his father who had moved out to another house, both of whom were staying in unstable structures. He couldn’t work on improving his house because he wanted to stabilize the houses of his younger brother and parents.

Prakash’s single room served a number of purposes from acting as a storehouse for the family’s various possessions to being utilized as a kitchen and sleeping space. During the rains a number of guests used to jostle in his house. The one room which his entire family lived in further gets cramped during the rains.  This is something that affected him the most.

Prakash had been associated with Shram Sarathi for the last four years and was now eligible for a loan of Rs. 20,000 but this amount wouldn’t serve his purpose. Once he learnt about Shram Sarathi’s new housing product he was excited to apply for the same but there was a problem. In order to meet Shram Sarathi’s eligibility criteria he had to construct the pillars of his new room-cum-hall. On being communicated the same, Prakash started construction with earnest and once he reached the eligible level, he immediately contacted Shram Sarathi again.

Within a week’s time the application process started. With help from Shram Sarathi’s construction technical service team he was able to draw up an accurate estimate of material and labour costs to be incurred. Once this was finalized, he was sanctioned a total loan amount of Rs. 50,000 of which he immediately received the first instalment of Rs. 35,000. Prakash promptly started the work of building an additional room.

He is now in the consolidation stage of his life. His first Shram Sarathi loan was for buying cattle. Post this with Shram Sarathi’s second loan he built up his asset base by buying silver followed by a third round of financing that enabled him to build a septic tank for his yet-to-be-constructed toilet. The freshly built room now acts as a covering structure for the toilet enabling him to build it faster in the near future. A conjoined staircase built with the loan will also enable him to shift his kitchen to the roof. Prakash further stated,

“On my own, I wouldn’t have been able to complete the house even in the next five years.”

Research shows that waiting over a prolonged period increases the cost of building a house by at least two times, thus resulting in indefinite postponement or piece-meal building resulting in an unstable structure. If postponed the total cost of completing his house could have shot up to more than one lakh rupees. He is a content man, who, sheds  his role as an RCC worker and takes on the mantle of a priest in Mewar’s biggest annual festive attraction – The Gangaur Mela.

Here is a video to take a closer look at Shram Sarathi’s work, especially the housing product being discussed here.