ADB, Aavas partner for USD 108M to boost housing, MSME loans

ADB signs a USD 108M deal with Aavas Financiers to expand affordable housing loans for lower-income households and MSME business loans in underserved states. The package has a special focus on women property owners and climate-resilient housing.

ADB's USD 108 Million Financing Package

The Asian Development Bank (ADB) has signed a senior secured debt financing package of up to USD 108 million (in Indian rupee equivalent) with Aavas Financiers Limited to expand access to affordable housing loans for lower-income households and business loans for micro, small, and medium-sized enterprises (MSMEs) in underserved states across India.

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 joined the signing event.

Promoting Green and Climate-Resilient Housing

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). As per a statement from ADB, 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. The transaction is also supported by up to USD 150,000 in technical assistance to build institutional capacity and boost market awareness of green housing solutions.

Advancing Inclusive Growth and Resilience

"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 prioritizing women property owners, the project advances inclusive growth and resilience."

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. The remaining 30 per cent will be onlent to MSMEs to spur entrepreneurship and jobs.

Aavas on Deepening ADB Partnership

Bhinder said: "We are proud to deepen our partnership with ADB. This funding aligns well with our portfolio mix and geographic focus and help us scale affordable housing for lower-income borrowers - especially for women homeowners, expand MSME lending and pioneer green self-construction at the last mile."

Aavas is a leading affordable housing finance company with a predominantly semi-urban and semi-rural footprint. The proposed financing builds on ADB's 2020 debt support to Aavas and aligns with India's priorities on Housing for All and MSME development.

About the CANPA Fund

Established in 2024, CANPA is a trust fund managed by ADB, supported by a commitment of Can$360 million from the Government of Canada. 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. CANPA aims to support private-sector projects in Asia and the Pacific that focus on climate and nature-based solutions, while also promoting gender equality. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)