Houses with Metro access show better financial discipline

Households that have access to Metro rail systems in their vicinity tend to show stronger household financial discipline with lower mortgage delinquency and higher loan prepayment rates, a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) has shown.

- DHRUVAKSH SAHA

“When mobility costs decline, households experience improvements in cash flow liquidity, potentially enabling better debt servicing and lower default risk,” said the paper authored by Soumya Kanti Ghosh, Pulak Ghosh, both part-time members at EAC-PM, and Falguni Sinha, an economist at State Bank of India (SBI).

Building on previous research based in Delhi, which showed similar outcomes, the working paper has analysed the trend of household financial discipline across Hyderabad and Bengaluru, two cities where Metro systems are largely evolving unlike Delhi, which has a relatively robust Metro system.