ADB provides $70m loan to expand affordable housing in India

The Asian Development Bank (ADB) and Vastu Housing Finance Corporation Limited (Vastu) signed a senior secured loan agreement of $70 million to improve access to affordable and sustainable housing loans in underserved states of India.

This funding will be used to offer loans to economically disadvantaged individuals and low-income groups, with a focus on female borrowers. A minimum of 15 per cent of the funds will be set aside for first-time borrowers.

“ADB aims to address the critical housing shortage in India while promoting environmentally friendly housing that enhances climate resilience for homeowners by focusing on lower-income households and sustainable housing,” said PSOD Director General Suzanne Gaboury.

This partnership with Vastu illustrates ADB’s commitment to supporting financial inclusion and sustainable development in India, in alignment with the country’s national financial inclusion strategy, she added.

The Reserve Bank of India (RBI) reports a shortage of 45 million houses for economically weaker communities and 50 million for low-income groups, making up 95 per cent of India’s housing deficit.

These groups face challenges in accessing credit due to high mortgage costs and limited credit history. Affordable housing finance companies are crucial in providing loans to new borrowers and self-employed individuals in rural and semi-urban areas.

Attribution: Amwal Al Ghad English

Subediting: M. S. Salama