IFC, a member of the World Bank Group, has invested Rs 130 crore in Jaipur-based Aavas Financiers Ltd (formerly known as Au Housing Finance Ltd) to extend housing loans to low-income consumers in rural and semi-urban areas.

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 income proof.

Using its proprietary credit underwriting and assessment tools, Aavas has helped nearly 35,000 customers buy a home since inception in 2012.

IFC’s investment will help them 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.

“At Aavas, we help fill a critical gap in access to home loans for people working in the informal sector and IFC's investment will help deepen our customer segment,” said Sushil Agarwal, Chief Executive Officer, Aavas Financiers.

Currently, India needs to build 11 million homes in the affordable segment. At an average of 4.6 people per household, the 11 million units’ gap implies that almost 50 million people do not have adequate housing.

“This new investment by IFC in Aavas is one of a series of investments and advisory engagements that IFC has 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,” said Jun Zhang, India Country Head, IFC.

Specific to affordable housing finance, IFC has invested close to $300 million in six housing finance companies and one mortgage guarantee company in India since 2010.

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