IIFL Home Finance (IIFL HFL) signs USD 68 million loan with Asian Development Bank (ADB) to boost affordable green housing in India

∙Association intends to improve financial access to affordable green housing for lower-income groups in India

∙The funding comprises a direct ADB loan of up to USD 58 million and a USD10 million concessional loan by the Canadian Climate Fund for the Private Sector in Asia (CFPS)

∙The CFPS loan will support IIFL’s green housing portfolio, specifically towards incentivising developers to adopt green certification standards in building affordable housing

Gurugram, 21st February, 2022: IIFL HFL, India’s fastest growing digital first home finance company, has signed a USD68 million loan with ADB to improve financial access to affordable green housing for lower- income groups in India.

The funding comprises a direct ADB loan of up to USD58 million and a USD10 million concessional loan by the Canadian Climate Fund for the Private Sector in Asia (CFPS). From ADB’s loan, 80% will be earmarked for lending to women borrowers or co-borrowers and 20% will be allocated to financing mortgages for green-certified homes. The CFPS loan will support IIFL HFL’s green housing portfolio, specifically towards incentivising developers to adopt green certification standards in building affordable housing.

Speaking on the agreement Mr. Monu Ratra, MD & CEO, IIFL HFL said, “Funding from ADB will help us to improve the penetration of green affordable housing in deeper markets of India and fulfill the dreams of many Indian families to own their own homes. We are glad to be partnering with ADB in our growth journey.”

To accelerate initiatives that improve access to green affordable housing for meeting the targets of Sustainable Development Goals 2030, it is important to actively pursue issues related to climate resilience, sustainability-orientated thinking and the achievement of gender-balance as fundamental approaches to development. Additionally there is a need to address market constraints around a lack of awareness around green home.

“By leveraging IIFL HFL’s focus on financial inclusion and CPFS’ leadership on climate-resilient housing, ADB can help low-income communities to manage the impacts of climate change,” said ADB Director General, Private Sector Operations Suzanne Gaboury. “We are pleased to support IIFL in demonstrating to the construction industry that you can build both affordable and green-certified housing for low-income households.”

In alignment with Government of India’s commitment towards ‘Housing for All’, IIFL HFL provides affordable home loans to Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG). Home loans have been disbursed to over 1,40,000 borrowers as on Sept 30th, 2021.

Additional complexities are faced by one of the major for this programme, women often find it difficult to obtain mortgage loans in India. This is cause of concern as lack of property ownership contributes to low social status of women, their vulnerability to poverty and low bargaining power within households. To counter this, of late however, there is an increasing focus on women ownership in housing as observed through guidelines of various housing schemes such as Credit-Linked Subsidy Scheme - Pradhan Mantri Awas Yojana (Urban) (CLSS-PMAY-U) and in-situ slum redevelopment, but there is a need to empower women further and shift their role from key stakeholder to a key decision maker.

To this effect, the loan agreement is supplemented by a technical assistance (TA) grant of up to USD 1 million for supporting the green building ecosystem in the affordable housing sector in the country. This is ADB’s first such private sector agreement in the country. Aiming to enable activities addressing some of the key identified obstacles for building the ecosystem for green certified and affordable housing. IIFL HFL shall also contribute an additional amount of up to USD 1,50,000, for supporting the above mentioned activities and objectives as described in the TA agreement. IIFL HFL has already been propagating green affordable housing in India through its platform ‘Kutumb’, which is a green building initiative addressing the affordable housing projects regarding issues relating to financing, technical know-how of green construction and certification and Environmental, Social and Governance (ESG) compliance. IIFL HFL in the recent past announced milestone of facilitating over 50,000 households under CLSS making it one of the leading FIs contributing towards PMAY-U. The company has been able to disburse subsidy of over Rs 1,200 crore to households since the launch of the scheme in June 2015.

About IIFL Home Finance Limited

IIFL Home Finance Limited (IIFL HFL) is a wholly-owned subsidiary of IIFL Finance Limited. It is one of India’s leading housing finance companies and is a preferred choice for affordable home loan requirements. As of 31stDecember 2021, the AUM stood at Rs 22,207 crore of which home loan is 74% of the total with an average ticket size of Rs 17 lakh. The Return on Assets (ROA) for the period is at 3.5%.

Through affordable home loans, IIFL HFL makes people's aspirations of owning a home a reality, while emphasising on supporting green buildings and projects that help society achieve inclusive sustainable development. The objective is to fulfill economic upliftment for EWS/LIG segments of the country. The company has adopted asset light model by getting into Co-Lending arrangements that further helps to penetrate and expand in deeper markets of India. To make customer experience seamless the entire life cycle of housing loans istechnology driven i.e., from origination to closure. The state-of-the-art IT infrastructure helps in reducing costs, real-time analysis of customer data, improving control and underwriting functions, while increasing customer reach and distribution capability.

About ADB

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

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