IFC, a member of the World Bank Group, today said it has invested Rs 130 crore in Jaipur-based Aavas Financiers to extend housing loans to low-income consumers in rural and semi-urban areas who have little or no access to mortgage finance.
This investment of Rs 130 crore is in line with IFC's strategy to increase access to affordable housing finance to promote inclusive growth and the mission for housing for all by 2022, the company said in a statement.
IFC's investment will help Aavas Financiers expand their reach to unserved and underserved low-income borrowers in Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, and Delhi/NCR. Kedaara Capital and Partners Group are the main investors in Aavas, it said.
"This new investment by IFC is one of a series of investments and advisory engagements that we have conducted recently in the affordable housing space, aiming to generate strong market momentum contributing to the full realisation of the national goal of housing for all by 2022," IFC India Country Head Jun Zhang said.
He also said Aavas is uniquely positioned in the expansion of the availability of mortgage financing to the affordable housing market segment.
"Aavas has a strong customer base in Rajasthan and adjoining states where the demand for affordable housing is high. Given the scale of the requirement and the immediacy of the need, IFC is highly committed to supporting like-minded partners in intensifying the flow of financing to the affordable housing market in India," Zhang added.
Aavas' customers include grocery merchants, dairy supply chains, carpenters, garment traders, and others who are either self-employed or salaried workers in the unorganised sector, often without an income proof.
"We help fill a critical gap on access to home loans for people working in the informal sector and IFC investment will support to deepen our customer segment," Aavas Financiers Chief Executive Officer Sushil Agarwal said.
Aavas' Chief Financial Officer Ghanshyam Rawat said, "IFC's long-term loan and partnership will help us broaden and deepen our funding profile, send a positive signal to other investors, and help us expand our lender base."
Specific to affordable housing finance, IFC has invested around USD 300 million in six housing finance companies and one mortgage guarantee company in India since 2010.
Since 1956, IFC has invested in over 400 companies in India, providing USD 17 billion in financing to the private sector from own account and through mobilisation.
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