Affordable Housing Initiatives Help Build a Roof for India’s Vulnerable


May 10, 2010--Like most of the 130,000 low-income households in India, Vidya Devi’s family was once unable to afford a home to call his home and had no way of accessing home loans or related financial services.

The family needed US $11,000, an amount too small for a bank to service, to acquire land where they hoped to retire. Devi’s pension and the earnings of her son, Anil, who works as a khalasi, or electrical technician, for the local railway were not enough to make the purchase without additional resources. Anil lives with Devi, his wife and their five-year-old son.

But a loan from IFC client Dewan Housing, a housing finance company, allowed the family to buy land in 2005.

“My dream of basking in the sun knitting while watching my grandchildren play in our own courtyard will come true,” said Devi.

IFC’S Long-Term Partnership

Low-cost housing was not yet a catchphrase when Dewan was founded in 1984 as India’s first privately-owned housing finance company.

“It’s been a long journey and not an easy one,” said Managing Director Kapil Wadhawan.

IFC’s investment in Dewan in 2003 supported the company’s efforts to improve access to housing finance among the underserved. IFC also assisted the company in improving corporate governance, reporting standards, and compliance. A hub-and-spoke model has since allowed Dewan set up branches in smaller Indian cities, such as Akola and Kanpur, to serve unmet needs in these markets.

Addressing a Growing Need

More than 14 percent of South Asians live in inadequate housing. In India, large investments and an appropriate policy framework are needed to meet affordable housing needs over the next three years. The country’s affordable housing market is expected to reach US $250 billion by 2012.

To make this possible, IFC has initiated a dialogue with government officials, bankers, developers, and other stakeholders to discuss pro-poor housing initiatives, alternate approaches to affordable housing and the governmental role in securitization of low-income housing.

IFC also runs training on global best practices in mortgage finance for staff at financial institutions who are entering this segment. Additionally, the IFC team evaluates strategic investments and public-private partnership opportunities in the housing microfinance sector for home improvements, targeting the poorer sections in India’s low-income states. Similar initiatives are being designed in Bangladesh as well.

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