ADB and AHFL Partner to Expand Housing Loans for Low-Income Women

The Asian Development Bank (ADB) has entered into a $60 million financing agreement with Aadhar Housing Finance Limited (AHFL) to provide housing loans to women in India. The initiative aims to address the shortage of financing in the low-income and affordable housing segment. Half of the funds will be deployed in Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh, and West Bengal.

Key Points

Financing Agreement Details

• ADB signed a $60 million nonconvertible debentures financing agreement with AHFL.
• $30 million has been disbursed so far.
• The financing is aimed at lending exclusively to women borrowers or co-borrowers.

Addressing Financing Gaps

• Poor households often resort to savings, borrowing from family or moneylenders due to difficulties meeting bank loan requirements.
• Women particularly face greater challenges accessing formal financing channels.

AHFL’s Commitment and Strategy

• AHFL focuses on increasing financial penetration in the low-income housing segment.
• Targeting salaried and self-employed individuals from economically weaker and low- to middle-income groups.
• Average loan size offered by AHFL is 900,000 Indian rupees (around $10,875).
• AHFL operates through a network of 471 branches across 20 states and union territories as of September 2023.

ADB’s Role and Vision

• ADB supports inclusive, resilient, and sustainable development in Asia and the Pacific.
• Established in 1966, ADB is owned by 68 members, including 49 from the region.
• Focuses on projects that provide basic services, critical infrastructure, and institutional strength, especially in low-income states.

Statements from Leadership

• Suzanne Gaboury, ADB Director General for Private Sector Operations, highlighted the struggle of poor households and the specific challenges faced by women in accessing financing.
• Rishi Anand, CEO of AHFL, emphasized the partnership with ADB as a step towards increasing home ownership among economically weaker sections and fulfilling their housing aspirations.

Company Profile: AHFL

• Specializes in housing finance for the low-income segment.
• Loan sizes under 1.5 million Indian rupees (around $17,976).
• Targets lower-income borrowers with products tailored to their needs.