IIFL HFL lends Rs 500 cr to green affordable housing projects

Hyderabad: IIFL Home Finance Ltd (IIFL - HFL), a digital-first home finance company, has funded around Rs 400-500 crore to promote green affordable housing projects in India. It has so far provided project finance of Rs 20-25 crore each to 18-20 developers across the country, IIFL HFL Executive Director and CEO Monu Ratra told Bizz Buzz.

He said, "The company has given funding of about Rs 60-70 crore to three green affordable housing projects in Hyderabad alone. We owe to affordable housing customers more, beyond just financial assistance to provide them habitations that are sustainable and ecologically healthier. We are creating awareness to spark a sustainable housing revolution."

Recently, IIFL HFL has signed Rs 528-crore loan agreement with Asian Development Bank (ADB) to improve funding to small-scale builders and lower-income individuals for affordable green housing projects. Out of the total loan, 80 per cent is earmarked for lending to women borrowers and 20 per cent is allocated to financing mortgages for green-certified homes.

In collaboration with the ADB, IIFL HFL has conceptualised Kutumb a knowledge ecosystem for better understanding of green design, rating and financing options. Identifying the urgent need for green affordable housing, it hosts Kutumb events all over the country to spread awareness about building climate resilient houses to save cost and energy. Since 2018, the company has organised 10 Kutumb events at different cities. Through these programmes, it wants to create awareness among local developers on various aspects of green affordable housing including technical know-how and certification process. It has signed MoU with 16-18 architects and civil engineers to act as in-house 'green value partners'.

"These green value partners cover the entire life cycle of the green affordable housing projects. They also clear the myths on sustainable housing. To build green homes, there is no need of any high-end specifications. Only an extra 2-4 per cent of overall cost of construction is required to make it a sustainable project," says Monu Ratra.

"Many people think that IIFL HFL provides finance to only new housing projects, but we also give funding for upgradation to homes. Probably, ours is the only organisation that disburses loans to non-salaried individuals who do not have a fixed income source. Almost 80-90 per cent of our customers are first-time home buyers," he adds.

IIFL HFL has also tied up with four banks – State Bank of India, Central Bank of India, Union Bank of India and Punjab National Bank to give affordable credit to home buyers under co-lending model. Under this arrangement, IIFL HFL manages home loan sourcing, servicing and 20 per cent of the loan, while the respective bank provides the rest of the loan amount.

Till date, the housing finance company has 87 branches in the two Telugu States, with 31 branches in Telangana and 56 in Andhra Pradesh. It disbursed over Rs 2,448 crore to more than 17,000 households in both the States (Rs 1,491 crore in Telangana and Rs 956 crore in AP) as on March 31, 2022.

IIFL HFL plans to further expand their physical reach in tier-3 and tier-4 markets by having 120 total branches by March 2023. It has set a target is to achieve over Rs 7,200 crore home loan business by 2025 in two States (Rs 2,880 crore in Telangana and Rs 4,320 crore in AP). Over 2,900 households were benefitted with Credit Linked Subsidy (under PMAY) of over Rs 66 crore.

The company has funded over 645 beneficiary-led construction (BLC) units with disbursement of over Rs 12 crore in AP. The BLC is a Centrally Sponsored Scheme, to provide assistance of up to Rs 1.5 lakh per house to individual eligible families belonging to economically weaker section categories to either construct new house or to enhance existing houses on their own.