Non-banking finance company Aavas Financiers on Monday said it has raised Rs 444 crore through debt instruments from the Asian Development Bank and the fund will be utilised for on-lending to women. The company has approved the allotment of 4,444 secured, rated, unlisted, redeemable, transferable and interest bearing, non-convertible debentures each aggregating up to Rs 444.40 crore to Asian Development Bank (ADB), Aavas said in a regulatory filing.
The ADB has signed an agreement to lend up to $60 million in Indian rupee equivalent to Aavas Financiers Ltd (Aavas), a housing finance company in India, to improve access to housing finance for lower income borrowers in the country, particularly women, ADB and Aavas said in a joint statement.
"It is very difficult for women in India, particularly in low-income groups, to obtain mortgage loans for their housing needs," said Senior Investment Specialist at ADB's Private Sector Operations Department Susan Olsen.
"This directly contributes to their low social status, vulnerability to poverty, and low bargaining power within households, Olsen added.
ADB's loan to Aavas will enable more property ownership among women and in lagging states across the country.
Aavas Managing Director and CEO Sushil Kumar said: "The funding from ADB will help us to further deepen our presence in lagging states and fulfil the lifetime dream of lower income Indian families to own their own house, especially for women. We are glad to be partnering with ADB in our growth journey," Kumar said.
The loan is disbursed under ADB's Supporting Access to Housing Finance for Women in Lower-Income Groups and in Lagging States Project. Aavas will use the funds to provide housing finance to women in low-income communities either as primary borrowers or co-borrowers.
India is experiencing a severe housing shortage estimated at 18.7 million units in urban areas and 43.7 million units in rural areas, mostly affecting low-income groups. They face several challenges in obtaining mortgages including a lack of documents to prove their incomes.