The senior citizen population in India is rapidly
growing and is expected to reach 117 million people by 2015. This
represents a huge opportunity for the reverse mortgage loan market.
Establishing an ecosystem for this product class is necessary to meet
increased demand.
The senior citizen population in India is growing
rapidly due to lower fertility rates, improved healthcare, and better
nutrition. The senior population is estimated to become 117 million by
2015, growing from the current population of 87 million. While this
segment of the population is increasing, it continues to be largely
neglected by policymakers.
The Indian government is now employing innovative
strategies towards change. It has begun introducing financial instruments
aimed at the senior population. Among several financial products being
encouraged is the reverse mortgage loan (RML), which was introduced by the
Finance Minister in his annual budget for 2007-08.
In a new report, Reverse Mortgage Market: Early
Days for India, Celent examines the opportunity and challenges
associated with this market opportunity from the lender’s perspective.
The RML product class is expected to have a directly addressable market
opportunity of around 6 million households with a total of US$113 billion
home equity by 2015 across both urban and rural India.
"There is great potential for this
market, but it requires the building of an ecosystem that would make the
product more viable for lenders in an Indian context," says Ravi
Nawal, analyst with Celent's banking group and author of the report.
"There is an expansive distance that needs to be covered by
regulatory institutions and lenders before this product sector makes any
significant headway in India."
This report examines the RML product
and discusses the feasibility of such a product in the Indian context from
the lender's viewpoint. It also looks at supply and demand side issues
associated with the product.
The 30-page report contains five tables
and nine figures. A table of contents is
available online.
