Case
Study

Case Study

01

CASE STUDY

IMGC and the lender working in collaboration since 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
  • 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 of over 10% in all locations. These loans are incremental volume for the lender (approximately INR 250 Cr per month).

The increase in business volumes can be attributed to the following benefits derived from Mortgage Guarantee product

  • Incremental business from new target segments and geographies
  • New builders, channel partners, 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

02

CASE STUDY

Lender is working with IMGC for 1.5 years with Mortgage Guarantee policy embedded in their internal product to launch home loans for affordable segment.

MG Proposition:

  • Grow affordable segment with MG
  • 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 product.

  • Incremental business from new target segments and geographies (borrowers)
  • New builders, channel partners, DMAs are on-boarded leveraging Mortgage Guarantee
  • Options for credit teams of lender partners 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

CASE STUDY

The lender 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)

04

CASE STUDY

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 +Mortgage Guarantee]> High Cash Collateral

Benefits Derived

Benefits derived by the Housing Finance Company

  • Cash collateral almost halved at the time of transactions
  • Additional comfort given to the Investor
  • Cashflow and loss support provided by IMGC to the Trust
  • 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