International Finance Corporation (IFC), a private sector funding arm of Work Bank group, plans to pick up eight per cent stake in Indian Mortgage Guarantee Company (IMGC) at an investment of Rs 80 crore.
The mortgage guarantee product will allow a partial transfer of the mortgage default risk to the insurance market and other institutional investors. It will also provide a new and effective avenue of risk diversification to the banking system.
The National Housing Bank (NHB) and United Guaranty Corporation (UGC), part of the US-based American International Group are the two main sponsors of IMGC. The other shareholders are IFC and Asian Development Bank (ADB).
The aggregate capital commitment for the mortgage guarantee corporation project is estimated at Rs 1,000 crore, IFC said. NHB will hold 43 per cent stake in the proposed entity to be incorporated in National Capital region (NCR). UGC will hold 41 per cent stake and the remaining 8 per cent will be picked up by ADB, the Manila-based multilateral funding agency.
