The International Finance Corporation (IFC) has announced a strategic investment of up to $100 million in IIFL Home Finance Limited (IIFL HFL) to strengthen access to housing finance for economically weaker sections (EWS) and low-income groups (LIG) in India. The collaboration aims to accelerate the growth of India’s affordable housing sector, foster sustainable construction practices, and contribute to the country’s climate objectives.
Addressing the Affordable Housing Gap
With India’s rapid urbanization, the demand for affordable housing has surged, estimated to reach 38 million housing units by 2030. EWS and LIG segments account for over 96 percent of this demand. However, limited financial resources and absence of credit history often hinder these groups, particularly women, from obtaining mortgages, making adequate housing elusive.
In response, 50 percent of the investment will be directed towards promoting housing finance for women borrowers, while the remaining half will focus on financing green housing for underserved buyers.
Advancing Sustainable Green Housing
Notably, the green building market constitutes merely 6 percent of residential buildings in India, despite offering a substantial $1.25 trillion opportunity by 2030. As part of this collaboration, IFC will provide performance-based incentives through the UK-IFC Market Accelerator for Green Construction Program (MAGC). These incentives will expedite the implementation of IIFL HFL’s green building strategy, encouraging the adoption of green-certified affordable housing units.
Inclusivity and Sustainability at the Core
IFC’s advisory services will play a crucial role in bolstering IIFL HFL’s green housing portfolio. By utilizing the Excellence in Design for Greater Efficiencies (EDGE) framework, enhancing staff capacity in green certification, and facilitating diversity and inclusion capacity-building, the partnership aims to increase the proportion of women borrowers and promote sustainable construction practices.
Promising Progress and Collaboration
IIFL HFL, a subsidiary of IIFL Finance Limited, has already made significant contributions by providing over 12,500 loans for Beneficiary Led Construction and Affordable Housing Projects under the Pradhan Mantri Awas Yojana. This collaboration between IFC and IIFL HFL not only aligns with the Indian government’s vision of ‘Housing for All’ but also underscores their commitment to financial inclusivity, sustainable practices, and equitable housing access in India.
As the demand for affordable housing continues to rise, and the need for green initiatives becomes paramount, the partnership between IFC and IIFL HFL promises a positive and transformative impact on India’s housing landscape.
