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IFC Invests in Aavas Financiers to Extend Affordable Housing Loans to Low-Income Borrowers in India


In New Delhi:                                                                  
Suveen Sinha                                                                  
Phone: +91 41111051                                                

Email:
SSinha10@ifc.org                                

Tanu Chhabra Bahl                                        

Phone: +91 41111064                                            
Email:
TBahl@ifc.org


July 20, 2017, Delhi, India: IFC, a member of the World Bank Group, has invested INR 1.30 billion ($20 million) in Jaipur-based Aavas Financiers Limited (formerly known as Au Housing Finance Limited) to extend housing loans to low-income consumers in rural and semi-urban areas who have little or no access to mortgage finance.

Aavas’ customers include self-employed or salaried workers in the unorganized sector, often without an income proof. Aavas helps fill the home financing gap for this segment that larger institutions normally don’t cater to because of operational costs and lack of credit score or proven credit history.


Using its proprietary credit underwriting and assessment tools, Aavas has helped nearly 35,000 customers buy a home, since its inception in 2012. IFC’s investment will help them expand their reach to unserved and underserved low-income borrowers in Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, and Delhi/NCR.


“At Aavas, we help fill a critical gap on access to home loans for people working in the informal sector and IFC’s long-term loan and partnership will help us deepen our customer segment” said Mr. Sushil Agarwal, Chief Executive Officer, Aavas Financiers.


Currently, India needs to build 11 million homes in the affordable segment. Bridging such a large gap is a significant challenge and all efforts to do so are directly aligned with World Bank Group’s twin goals of reducing poverty and increasing shared prosperity. Home ownership helps improve living standards and the housing construction industry is a significant employment generator. Both are critical to IFC’s mission.


“This new investment in Aavas is one of a series of investments and advisory engagements that IFC has conducted in the affordable housing space, aiming to generate strong market momentum contributing to the full realization of the national goal of Housing for All by 2022,” said Jun Zhang, India Country Head, IFC.


IFC has invested close to $300 million in six housing finance companies and one mortgage guarantee company in India since 2010. In 1978, IFC came in as the founding investor in HDFC to set up India’s first private sector retail housing finance company. In 2010, it helped form the first affordable housing finance company in India, focused exclusively on the needs of low-income segments.


Since 1956, IFC has invested in over 400 companies in India, providing $17 billion in financing to the private sector from own account and through mobilization.


About IFC

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY16, we delivered a record $19 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit
www.ifc.org

About Aavas Financiers

Aavas Financiers (formerly Au Housing Finance Ltd.) was incorporated as a subsidiary of Au Financiers (India) Limited in February 2011 for providing housing finance in rural and semi-urban areas. The company formally started its operations in March 2012 and is headquartered in Jaipur, Rajasthan. Subsequently to fulfil RBI criteria for conversion to Small Finance Bank, Au Financiers (India) Limited divested their stake in Au Housing to PE investors – Kedaara Capital Group and Partners Group, in June 2016. Aavas is primarily engaged in providing home loans to customers in unserved and underserved market. The company is focused on low-cost and affordable housing segment, targeting salaried and self-employed customers in the informal segment. The company is currently operating in 6 states: Rajasthan, Maharashtra, Madhya Pradesh, Gujarat, Haryana, and Delhi/NCR through a network of 111 branches and has assets under management of around Indian rupees 2,900 crore.


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