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ADB & Aavas Ink $108M Deal for Affordable Green Homes & MSME Loans in India

The Asian Development Bank has signed a $108 million financing package with Aavas Financiers to expand access to affordable housing and MSME loans in India's underserved states. The funding will prioritize climate-resilient, green-certified homes and allocate at least 50% of housing loans to women property owners. A portion of the capital is concessional debt from the Canadian Climate and Nature Fund for the Private Sector in Asia (CANPA). The project aims to advance inclusive growth, boost entrepreneurship, and promote gender-responsive finance.

Key Points: ADB Funds $108M for Affordable Housing & MSME Loans in India

  • $108M financing for affordable housing & MSMEs
  • Focus on climate-resilient, green-certified homes
  • 50% of housing loans targeted for women owners
  • Supports India's Housing for All & MSME development goals
3 min read

ADB partners with Aavas Financiers to expand affordable housing, MSME lending in India

ADB partners with Aavas Financiers to provide $108M for climate-resilient homes and MSME lending, focusing on women and underserved states.

"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. - Mio Oka, ADB"

New Delhi, February 24

The Asian Development Bank has signed a senior secured debt financing package of up to USD 108 million 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 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.

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.

"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.

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.

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

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Reader Comments

R
Rohit P
Good initiative, but the real test is execution. Will these loans actually reach the intended beneficiaries in the "lagging states" without excessive paperwork and middlemen? Hope the technical assistance ensures transparency.
S
Siddharth J
Combining affordable housing with MSME lending is smart. A small business loan can help a family build a home, and a stable home allows someone to focus on growing their business. This holistic approach is what development should look like.
A
Aman W
The green-certified homes part is crucial. We need to build climate resilience from the ground up, especially in villages prone to heatwaves and floods. Hope the "green self-construction" models are practical and cost-effective for the last mile.
N
Nisha Z
As a woman who recently took a joint home loan, I appreciate the focus on women property owners. It's more than finance; it's about social empowerment and security. Hope the process is simple and encourages more women to come forward.
D
David E
Interesting to see Canada's involvement through CANPA. International partnerships like this are vital for scaling up climate and development goals. The $108 million is a significant boost for affordable housing finance in India's underserved regions.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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