India\u2019s affordable housing mission is facing significant challenges as public sector banks (PSBs) fall far short of their lending targets for economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG). In FY26, PSBs sanctioned around 191,000 housing loans against a target of 643,000, achieving only 29.5% of the planned goal.<\/p>\n
Experts highlight that the gap is driven by multiple factors, including limited availability of affordable housing projects, strict lending criteria, lengthy documentation processes, and difficulties in assessing creditworthiness among lower-income borrowers. While government initiatives have encouraged home ownership, the mismatch between affordable housing supply and demand continues to impact loan growth.<\/p>\n
Affordable housing requires stronger collaboration between financial institutions, developers, and policymakers. Expanding access to verified affordable projects, simplifying loan procedures, improving borrower awareness, and leveraging technology-based credit assessment models can help address these challenges.<\/p>\n
The slowdown in affordable housing lending reflects a broader issue in India\u2019s real estate ecosystem \u2014 ensuring that financial support reaches the segments that need it the most. With rising urbanisation and increasing demand for budget-friendly homes, strengthening affordable housing finance will remain critical for achieving inclusive growth and wider home ownership.<\/p>\n