NEW DELHI: The Asian Development Bank (ADB) announced on Tuesday that it has finalized a senior secured debt financing package worth up to USD 108 million (approximately Rs 983 crore) with NBFC Aavas Financiers. This funding aims to enhance access to affordable housing loans for lower-income families and business loans for MSMEs in underrepresented regions across India.
The package comprises concessional debt financing of USD 8 million (in INR equivalent) sourced from the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA), as detailed in an ADB statement.
This financing will facilitate loans for self-built and green-certified housing, which will encourage climate-resilient and energy-efficient solutions for lower-middle-income borrowers.
Furthermore, the transaction includes up to USD 150,000 for technical assistance aimed at enhancing institutional capacity and increasing awareness of green housing solutions.
According to Mio Oka, ADB’s Country Director for India, “ADB’s support will unlock formal credit for underserved families and entrepreneurs, while also accelerating the transition towards climate-aligned and gender-responsive housing finance.”
The initiative is designed to focus on underdeveloped areas and prioritize female property owners, fostering inclusive growth and resilience.
At least 70% of the ADB financing will be directed toward housing loans for low-income borrowers, with 50% designated specifically for female property owners (as sole or joint owners). The remaining 30% will be allocated to micro, small, and medium-sized enterprises (MSMEs) to promote entrepreneurship and job creation.
The agreement was signed by Isabel Chatterton, Director General of ADB’s Private Sector Operations Department, Sachinder Bhinder, Managing Director and CEO of Aavas Financiers Limited, and Phedra Moon Morris, a representative from Global Affairs Canada.
Established in 2024, CANPA is a trust fund managed by ADB and funded by a commitment of 360 million Canadian dollars from the Canadian government. This fund builds on the success of its predecessors, the Canadian Climate Fund for the Private Sector in Asia II (CFPS II) and CFPS.
