The Asian Development Bank (ADB) has formalized a significant financing agreement, committing up to USD 108 million to Aavas Financiers Limited. This initiative aims to enhance access to affordable housing loans for lower-income households and business loans for micro, small, and medium-sized enterprises (MSMEs) in underserved regions throughout India. The financing arrangement was marked by a signing event attended by key officials, including ADB Private Sector Operations Department Director General Isabel Chatterton and Aavas Financiers Limited's Managing Director and CEO Sachinder Bhinder.
This financial package comprises concessional debt financing of USD 8 million, which is equivalent in Indian rupees, allocated through the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA). The ADB's investment is expected to facilitate housing loans for self-built and green-certified homes, thereby promoting climate-resilient and energy-efficient housing solutions targeted at lower-middle-income borrowers. Furthermore, the project is supplemented by technical assistance amounting to up to USD 150,000, aimed at enhancing institutional capacity and increasing market awareness regarding green housing alternatives.
ADB's Country Director for India, Mio Oka, emphasized the importance of this initiative, stating that it will provide formal credit access to underserved lower-income families and entrepreneurs. The project is particularly focused on accelerating the transition toward climate-aligned and gender-responsive housing finance. As part of the financing structure, at least 70 percent of the ADB debt will be directed towards housing loans for lower-income borrowers, with a stipulation that 50 percent of these loans will benefit women property owners, either as sole or joint owners. The remaining 30 percent of the funding will be directed to MSMEs to stimulate entrepreneurship and job creation.
Aavas Financiers Limited, a prominent player in the affordable housing finance sector, primarily operates in semi-urban and semi-rural areas. This new financing arrangement builds upon ADB's previous support in 2020 and aligns with the Indian government's objectives regarding Housing for All and the development of MSMEs. Established in 2024, the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA) is a trust fund managed by ADB, built on a commitment of Can$360 million from the Government of Canada. The fund aims to support private-sector projects in Asia and the Pacific that focus on climate and nature-based solutions, while also promoting gender equality. This collaboration between ADB and Aavas Financiers Limited marks a significant step towards addressing housing and entrepreneurial challenges in India, particularly for vulnerable and underserved populations.