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IFC Extends Access to Home Improvement Financing for India’s Poor 2, 2013 -- For Jamna, a small business owner and a mother of four from a low-income neighborhood of New Delhi, taking a micro-loan for home extension was a timely solution. “Both our business and family were growing, so we needed more space: just having a ground floor wasn’t enough. We built a new floor on top and rented out one room, which adds to our monthly income.”


Jamna is one of 1.1 million clients of Ujjivan Financial Services, a microfinance institution active in 20 Indian states. Ujjivan caters to customers at the base of the pyramid with little or no proof of income, such as vegetable vendors, saree-weavers, carpet-makers and mobile-shop owners, the majority of whom are women.


IFC invested $8.1million and worked with Ujjivan to create a microfinance housing product: micro- and small loans for home improvements, construction, land acquisition, and property purchase. Ujjivan is among the first in the Indian market to offer housing loans to the poor, who previously could not access finance to improve their living conditions.


Furthermore, building on the lessons learned from recent microfinance crisis in India, Ujjivan took steps to make its business more sustainable. Today, it is one of IFC’s key partners in promoting responsible finance through financial education and client protection.


Partnership with Ujjivan is in line with IFC’s increased focus on South Asia, where 31% of the population is still living below the $1.25 poverty line. India – the largest country in the region - has one of the world’s worst shortfalls of affordable housing, with a gap valued at $67 billion (McKinsey). Addressing both poverty and housing shortage, Ujjivan’s initiative also has an important demonstration effect.


IFC has been catalyzing development of housing finance markets across the globe for over 30 years. IFC’s Housing Finance group invests and mobilizes capital for housing finance, provides advice to financial institutions, and works to improve the enabling environment for housing finance.

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