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The World Bank has approved $100-million concessional loan to National Housing Bank (NHB) for the implementation of low-income housing scheme.
This is for the first-time ever that NHB is availing a line of credit from the World Bank, R.V. Verma, Chairman & Managing Director, NHB, said.
It will also mark the re-entry of the World Bank to the housing finance sector after a long time.
NHB has got a 25-year concessional loan for $100 million from the World Bank’s International Development Assistance (IDA) window.
The drawdown will soon start and the funds will be utilised as refinance to housing finance companies and banks for supporting their low-income housing products.
The cost of borrowing under this World Bank window will be much lower than average cost of funds for NHB.
Verma also said the technical assistance coming as part of the World Bank loan will be used for capacity building of housing finance companies to cater to the informal sector.
NHB has been availing lines of credit from multilateral bodies and international institutions like Asian Development Bank and KfW for the development of housing finance market in the country.
This World Bank assistance also goes well with RBI’s recent announcement on the need to develop a long-term fixed rate mortgage market, Verma pointed out.
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