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
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,
“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
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
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
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