Repco Home Finance (RHFL) plans to raise up to $40 million (about ₹ 268.85 crore) by way of issuing NCDs (non-convertible debentures) to International Finance Corporation (IFC), a member of the World Bank Group.

 

The fund is intended to expand RHFL’s reach and penetration in the affordable housing finance segment.

 

“IFC debt will help diversify the funding profile of the company, which is currently largely dependent on banks and NHB for their funding needs. The NCDs will also provide RHFL with long term debt of seven years which is also not readily available from the market, according to an IFC communiqué.

 

With the proposed funds, RHFL plans to lend to individuals in the affordable home segments, especially in the low Tier II and Tier III cities in states outside of South India. 

As of April 2015, RHFL operated through 106 branches and 36 satellite centres in Tamil Nadu, Andhra Pradesh, Telangana, Jharkhand, Kerala, Karnataka, Maharashtra, Madhya Pradesh, Gujarat, Odisha, West Bengal and Puducherry.

 

RHFL, a listed entity on the Indian bourses, is focused on providing access to housing finance to low income borrowers, specifically those employed in the informal sector such as self-employed micro-entrepreneurs and un-organized sector salaried workers. This segment is largely ignored by the large HFCs (housing finance companies) and banks owing to perceived higher risk profile of such borrowers and difficulty in credit assessment.

 

According to the housing plan of the Government of India, about 100 million homes must be built in India, 95 per cent of which will be in the economically weak and low-income categories - affordable housing segment.

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