The Asian Development Bank (ADB) has signed an agreement to lend up to $60 million in Indian rupee equivalent to Aavas Financiers Limited (Aavas), a housing finance company in India, to improve access to housing finance for lowerincome borrowers in the country, particularly women.
"It is very difficult for women in India, particularly in low-income groups, to obtain mortgage loans for their housing needs," said Senior Investment Specialist at ADB's Private Sector Operations Department Susan Olsen. "This directly contributes to their low social status, vulnerability to poverty, and low bargaining power within households. ADB's loan to Aavas will enable more property ownership among women and in lagging states across the country."
Managing Director and CEO of Aavas Sushil Kumar Agarwal said: "Funding from ADB will help us to further deepen our presence in lagging states and fulfill the lifetime dream of lowerincome Indian families to own their own house, especially for women. We are glad to be partnering with ADB in our growth journey."
Co-founder and Chief Financial Officer of Aavas, Ghanshyam Rawat said: "Limited access to long term funding remains a significant hurdle for affordable housing finance. ADB's long tenure funding in the current market environment will not only help us to cater large underserved affordable housing but also improve investor confidence in the affordable housing finance sector as a whole."
The loan is disbursed under ADB's Supporting Access to Housing Finance for Women in Lower-Income Groups and in Lagging States Project. Aavas will use the funds to provide housing finance to women in low-income communities either as primary borrowers or co-borrowers.
India is experiencing a severe housing shortage estimated at 18.7 million units in urban areas and 43.7 million units in rural areas, mostly affecting low-income groups. They face several challenges in obtaining mortgages including a lack of documents to prove their incomes.
Aavas is one of the largest housing finance companies in India's affordable housing segment. It has more than 70 billion rupees in assets under management and 245 branches across 10 states as on 31st December 2019.
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.