An Exploration of Issues

This paper explores the prospects for reverse mortgage (RM) products in India. Developed countries are faced with severe budgetary constraints in sustaining their current universal and liberal old age social and income security (OASIS) programmes. Developing countries are slated to face acute problems in meeting the OASIS needs of their projected population of the elderly. These budgetary constraints and increasing expectations on quality of life amongst the elderly would fuel a massive demand for financial products tailored to the elderly- for safe investment avenues, systematic liquidation of assets to finance consumption, managing longevity and inflation risks and imparting liquidity to illiquid assets. RM encompasses a range of non-recourse mortgage loans, which help a borrower get liquid funds against his home equity, without having to move out or having to make any repayments, till he dies or sells the house or moves out. Since bulk of the savings at retirement is typically locked in home equity, RM is a powerful device to increase the incomes of the elderly. RM has been in existence in Europe for several centuries but i