AfDB and IIFL Home Finance sign $68 million loan to improve women’s access to green housing in India
The Asian Development Bank (ADB) and IIFL Home Finance Limited (IIFL) have signed a $68 million (Indian Rupee equivalent) loan to improve financial access to affordable green housing for low-income female borrowers in India.
The funding includes a direct AfDB loan of up to $58 million and a concessional loan of $10 million from the Canadian Climate Fund for the Private Sector in Asia (CFPS). Of the AfDB loan, 80% will be for loans to female borrowers or co-borrowers and 20% allocated to finance mortgages for certified green homes. The CFPS loan will support the IIFL’s green housing portfolio, particularly to incentivize developers to adopt green certification standards in the construction of affordable housing.
“By leveraging IIFL’s focus on financial inclusion and CPFS’s leadership on climate-resilient housing, AfDB can help low-income communities manage the impacts of climate change,” said AfDB Director General for Private Sector Operations, Suzanne Gaboury. “We’re excited to help the IIFL demonstrate to the construction industry that you can build affordable, green-certified housing for low-income households.”
Women often find it difficult to get mortgages in India. A 2017 study showed that only 5% of women have borrowed from a formal financial institution and only 3% have an outstanding home loan. Lack of property contributes to women’s low social status, vulnerability to poverty and low bargaining power within households.
“The AfDB financing will help us improve the penetration of green affordable housing in India’s deeper markets and fulfill the dreams of many Indian families of owning their own home. We are pleased to partner with the AfDB on our growth journey,” the IIFL said. CEO and Executive Director Monu Ratra.
Green-certified buildings can be more expensive to construct, which has limited their adoption by buyers and developers in India. The market is also constrained by the lack of awareness that building green homes can lead to long-term savings of up to 35% and are less vulnerable to climate-related risks.
IIFL is one of India’s leading housing finance companies with over Rs 207 billion in assets and 125 branches in 18 states. With a focus on India’s lower income groups and economically weaker sections, IIFL can serve almost all of its clients digitally.