Low and middle-income borrowers will be able to own homes with improved access to finance, thanks to a new investment aiming to boost affordable housing finance in India
International Finance Corporation (IFC) has provided a loan of $250 million ( ₹1,875 crore) to HDFC, India's largest housing finance company, to promote affordable green housing finance for low and middle income borrowers.
IFC, the private sector investment arm of World Bank Group, will support HDFC's move to grow its green affordable housing portfolio by improving access to such housing for those in the low-income group.
Aligned with the government of India’s goal to provide ‘Housing for All,’ the funding will help generate jobs, a statement said on Sunday.
At least 25 percent of the financing has been earmarked for green affordable housing, which is likely to encourage this market in India
Green housing is largely regarded as a luxury market in the country, but given its climate benefits, IFC intends to challenge the perception. It is aiming to boost green affordable housing by partnering with HDFC, with its deep penetration in the Indian housing market and significant commitment to promoting green housing.
“With most banks and housing finance companies in India still at the stage of evolving their business models to lend to lower income people, this investment should send a clear demonstration that green affordable housing is viable and needed, especially as India moves on the road to recovery from the impacts of COVID-19, said Hector Gomez Ang, Regional Director for South Asia at IFC.
IFC estimates there’s a $1.25 trillion investment opportunity in green residential housing in India to the year 2030. To help grow the market, IFC has made investments worth over $920 million in housing finance companies in India—85 percent in the last five years—for on-lending to retail buyers of affordable housing and developers of affordable and green housing.