ADB commits USD 108 mn to Aavas Financiers for affordable housing loans

Asian Development Bank on Tuesday said it has signed a senior secured debt financing package of up to USD 108 million (about Rs 983 crore) with NBFC Aavas Financiers to expand access to affordable housing loans for lower-income households and business loans for MSMEs in underserved states across India. The package includes concessional debt financing of USD 8 million (in Indian rupee equivalent) through the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA), Asian Development Bank (ADB) said in a statement. The financing will support housing loans for self-built and green-certified homes, promoting climate-resilient and energy-efficient housing solutions for lower-middle-income borrowers, it added. The transaction is also supported by up to USD 1,50,000 in technical assistance to build institutional capacity and boost market awareness of green housing solutions, it said. ''ADB's support will unlock formal credit for underserved lower-income families and entrepreneurs while accelerating the shift toward climate-aligned and gender responsive housing finance,'' said ADB country director for India Mio Oka. By focusing deployment in lagging states and prioritising women property owners, the project advances inclusive growth and resilience, she added. Under the transaction, at least 70 per cent of the ADB debt financing will support housing loans for the lower-income borrowers, with 50 per cent of such loans going to women property owners as sole or joint owners, it said, adding that the remaining 30 per cent will be onlent to micro, small, and medium-sized enterprises (MSMEs) to spur entrepreneurship and jobs. ADB Private Sector Operations Department Director General Isabel Chatterton, Aavas Financiers Limited Managing Director and Chief Executive Officer Sachinder Bhinder, and Representative from Global Affairs Canada Phedra Moon Morris signed the agreement. Established in 2024, CANPA is a trust fund managed by ADB, supported by a commitment of 360 million Canadian dollars from the Canadian government. The fund builds on the success of the two previous funds, namely the Canadian Climate Fund for the Private Sector in Asia II (CFPS II) and its predecessor, CFPS.