Dewan Housing Finance company will be funded by International Financial Corporation (IFC) with Rs. 85 crores to avail finance for affordable housing and energy-efficient housing in India. IFC is a member of World Bank Group and the finance will be provided with the assistance of Government of Canada. Affordable housing and energy-efficient housing are in great demand in the country; hence funds are aggregated to support the demands with adequate supply.
IFC, will formerly provide Rs. 7 crore through external commercial borrowing. Another Rs. 5 crore will financed by IFC’s newly initiated programme IFC-Canada Climate Change Program implemented by Government of Canada’s instrumental contribution, as an initiative to encourage green development and reduce carbon emission. The loan to Dewan, to be used for green mortgages, will reduce 6,200 tons of carbon emissions per year.
“While housing finance is one of the lowest risk asset classes in India, financial institutions have so far shown limited interest in the low income segment,” said Kapil Wadhawan, Chairman and Managing Director, Dewan Housing Finance. “IFC’s investment will demonstrate the viability of offering housing finance to low and middle income clients. IFC’s support to Dewan is a recognition of the company’s track record in serving this segment.”
“Promoting housing finance is one of the key priority areas for IFC in India, especially in India’s low income states,” said Serge Devieux, IFC Director for South Asia. “By demonstrating the benefit of green homes, the project is expected to help home buyers in low and middle income segments buy affordable energy-efficient homes.”
IFC has a long-term partnership with Dewan Housing over the last decade. In 2003, IFC provided a loan of around $12.5 million to the company. IFC also co-invested in Aadhar Housing Finance, a company jointly promoted by DHFL Group and IFC, which provides affordable home loans to low income borrowers.