IFC, a member of the World Bank Group, has invested ₹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 an income proof.
Using its proprietary credit underwriting and assessment tools, Aavas has helped nearly 35,000 customers buy a home, since its inception in 2012.
IFC’s investment will help the company expand its 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 on access to home loans for people working in the informal sector and IFC investment will support to 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 realization of the national goal of Housing for All by 2022,” said Jun Zhang, India Country Head, IFC.
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