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Paper short abstract:

This paper examines the role of housing in household welfare, focusing on low-income households in Delhi’s unauthorised colonies. It employs ethnographic analysis, combining a survey of 200 households with case studies, to explore how houses are used as collateral in informal credit markets.

Paper long abstract:

This paper examines the pivotal role of housing in household welfare, particularly in the context of low-income households in metropolitan areas facing challenges in homeownership. It highlights the emergence of new urban housing capital in Delhi's unauthorised colonies, formed from converted agricultural fields, and its impact on the city's geography. The study explores the ongoing process of capital accumulation and investigates informal mechanisms for accumulating capital, focusing on houses with semi-legal titles used as collateral in the informal credit market. To comprehensively understand this complex landscape, the study undertakes a survey, which offers a broad understanding with a robust sample size of two hundred households. A notable finding of the study is the role of social capital in creating informal financial spaces where credit is extended based on community networks and trust. This underscores the importance of social connections in shaping financial access. Thorough background checks on borrowers within these networks are essential to maintaining the integrity of interest-free lending. The rates charged if any are comparable to formal institutions. The paper also presents case studies illustrating how social capital operates within informal credit markets and its influence on the financial well-being of households in these colonies.