IIFL Home Finance signs $68m loan agreement with AfDB – pv magazine India
IIFL Home Finance Limited (IIFL), India’s leading housing finance company, has signed a $68 million loan agreement with the Asian Development Bank (AfDB) to improve financial access to affordable green housing for low-income women borrowers in India.
The funding includes a direct AfDB loan of up to $58 million and a concessional loan of $10 million from the Canadian Climate Fund for the Private Sector in Asia (CFPS). Of the AfDB loan, 80% will be for loans to female borrowers or co-borrowers and 20% allocated to finance mortgages for certified green homes. The CFPS loan will support the IIFL’s green housing portfolio, particularly to incentivize developers to adopt green certification standards in the construction of affordable housing.
“By leveraging IIFL’s focus on financial inclusion and CPFS’s leadership on climate-resilient housing, AfDB can help low-income communities manage the impacts of climate change,” said AfDB Director General for Private Sector Operations, Suzanne Gaboury. “We are excited to help the IIFL demonstrate to the construction industry that you can build affordable, eco-certified housing for low-income households.”
Women often find it difficult to get mortgages in India. A 2017 study showed that only 5% of women have borrowed from a formal financial institution and only 3% have an outstanding home loan. Lack of property contributes to women’s low social status, vulnerability to poverty and low bargaining power within households.
“The AfDB financing will help us improve the penetration of affordable green housing in India’s deeper markets and fulfill the dream of many Indian families of owning their own home. We are pleased to partner with AfDB on our growth journey,” said IIFL CEO and Executive Director, Monu Ratra.
Green-certified buildings can be more expensive to construct, which has limited their adoption by buyers and developers in India. The market is also constrained by the lack of awareness that building green homes can lead to long-term savings of up to 35% and are less vulnerable to climate-related risks.
The IIFL has 125 branches in 18 states. With a focus on India’s low income groups and economically weaker sections, IIFL can serve almost all of its clients digitally.
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