By Arun Kumar

Washington, Oct 8 (IANS) India has an estimated housing shortage ranging from 20 million to 70 million, yet as much as half of this excess demand can be profitably serviced by the housing and housing finance markets, says a new World Bank report.

High economic growth coupled with rapid urbanisation and a rising middle class have created considerable demand for housing and housing finance in South Asia, says the report entitled "Expanding Housing Finance to the Underserved South Asia".

South Asia's housing and housing finance markets have grown at an impressive 30 percent rate in the past decade, but are limited to upper-income groups, it says.

Around 30 million middle- and lower- class households in South Asia - which accounts for 11 percent of the region's population - have the willingness to pay, but unable to have access to mortgages.

The report examines housing shortages in South Asia, as well as outlines shortcomings of the market for home financing. It highlights the need to make mortgages available to the poor and broaden its reach among the middle- and lower- class.

"Going forward, mortgage product innovation and customisation to client needs would make housing affordable to an increasing number of families." said Janamitra Devan, The World Bank's Vice President for Finance and Private Sector Development.

"There is a considerable potential to expand housing and housing finance to middle- and lower-income households, provided appropriate market institutions, enabling policies, and a varied range of innovative housing and mortgage products are in place. In some countries such as India, this shift is already afoot."

In India, it may be commercially viable to build housing for 23-28 million households (35-45 percent of urban India) whose monthly household incomes are in the range of Rs 5,000-11,000 ($110-$250).

One in every 4 people on the planet live in the South Asia region, and more than 14 percent of South Asians have no home, not counting a further 45 percent living in overcrowded conditions.

The region's future economic growth, social development, and employment are tied to providing housing and the funding for home-ownership, the report noted.

"The good news is that housing and housing finance services have the potential to expand to middle- and lower- income families," said Tatiana Nenova, the World Bank's Senior Economist, Private and Financial Sector Development for the South Asia Region and author of the report.