IFC, Rajasthan government to set up housing finance firm

October 27th, 2010 - 9:40 pm ICT by IANS  

New Delhi, Oct 27 (IANS) International Finance Corporation (IFC), an agency of the World Bank, said Wednesday it will set up a new housing finance company in collaboration with Rajasthan government and the National Housing Bank to provide cheaper loans to low-income households.

IFC’s own stake and mobilisation through stakeholders such as the National Housing Bank, government of Rajasthan, and private sector players, will help establish the company with an initial capital of $22 million, IFC said in a statement.

The exact shareholding structure is currently under discussion. The new company will focus on providing affordable housing finance options to low- and middle-income households that have limited or no access to formal financial services.

“Involvement of multiple stakeholders and the ability to build successful public-private partnerships is crucial to developing an ecosystem that will improve accessibility of housing finance and affordable housing. We will support the company through equity, training, and refinancing,” said R. V. Verma, Chairman and Managing Director, National Housing Bank.

According to World Bank estimate, nearly 15 percent South Asian population have no home or live in inadequate housing such as urban slums and squatter settlements. While the region’s housing and housing finance markets are dynamic, they are limited in their outreach, catering primarily to upper-income groups.

“There is a huge unmet need for housing finance in India. Addressing this need is a strategic priority for IFC. Access to housing and affordable home financing plays a critical role in creating jobs, enhancing incomes for the less privileged, strengthening financial markets, and triggering sustainable and inclusive growth,” said Tom Davenport, IFC Regional Director for South Asia.

“By partnering in instituting this new company, we now have an example of a first-of-its-kind model to harness market opportunities while making affordable housing loans available,” G. S. Sandhu, Principal Secretary, Urban Development and Housing, Rajasthan, said in a statement.

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