IFC to invest $100 million in IIFL Home Finance to increase access to housing finance for low-income groups in India

International Finance Corporation (IFC) is set to invest up to $100 million in IIFL Home Finance Limited (IIFL HFL) in a move aimed at increasing access to housing finance for economically weaker sections (EWS) and low-income groups (LIG), including women borrowers in India. This investment is poised to catalyse India’s affordable housing sector, foster eco-friendly construction practices, and contribute to India’s climate objectives.

Bridging the housing finance gap for vulnerable communities

India’s rapid urbanisation has intensified the demand for affordable housing, with an estimated requirement of 38 million housing units by 2030. EWS and LIG segments account for over 96 percent of this demand.

Also read: PNB Housing Finance share price jumps over 8% on recovery of ₹784 crore worth non-performing account

Lower-income groups, especially women, often lack the financial resources and credit history necessary to secure mortgages, making adequate housing a distant dream. Under this partnership, 50 percent of the funding will be dedicated to promoting housing finance for women borrowers, with the remaining 50 percent allocated to financing green housing for underserved buyers.

Green housing for a sustainable future

IFC’s estimates suggest that India’s green building market constitutes only 6 percent of residential buildings, despite representing a $1.25 trillion opportunity between now and 2030. As part of this collaboration, IFC will offer performance-based incentives through the UK-IFC Market Accelerator for Green Construction Program (MAGC) to expedite the implementation of IIFL HFL’s green building strategy and stimulate the adoption of green-certified affordable housing units.

Also read: PNB Housing Finance recovers NPA account of ₹784 crore, resolved through ARC sale: Report

Building a more inclusive and sustainable India

In addition, IFC’s advisory services will work to strengthen IIFL’s green housing portfolio by sharing expertise using the Excellence in Design for Greater Efficiencies (EDGE) framework and enhancing staff capacity in green certification. Moreover, IIFL will leverage IFC’s proficiency in diversity and inclusion capacity-building to increase the proportion of women borrowers in its portfolio.

As of March 31, 2023, IIFL HFL had provided more than 12,500 loans to Beneficiary Led Construction and Affordable Housing Projects under Pradhan Mantri Awas Yojana, aligning with the Government of India’s vision to ensure ‘Housing for All.’ IFC’s funding, primarily focused on self-constructed green affordable housing, will further bolster progress in this sector.

IIFL Home Finance Limited (IIFL HFL) is a subsidiary of IIFL Finance Limited, with 79.59 percent shareholding, while Abu Dhabi Investment Authority acquired a 20.41 percent stake in the company in 2022.