ADB, Vastu Housing Finance to Enhance Access to Affordable and Sustainable Housing in India

NEW DELHI, INDIA (23 December 2024) – The Asian Development Bank (ADB) and Vastu Housing Finance Corporation Limited (Vastu) have entered into a senior secured loan agreement of up to $70 million to enhance access to affordable and sustainable housing loans in India’s underserved states. This financing will be utilized to provide loans to economically weaker sections and low-income groups, with an emphasis on female borrowers. At least 15% of the funds will be allocated to first-time borrowers.

"ADB aims to address the critical housing shortage in India while promoting environmentally friendly housing that enhances climate resilience for homeowners by focusing on lower-income households and sustainable housing," said PSOD Director General Suzanne Gaboury. "This partnership with Vastu illustrates ADB's commitment to supporting financial inclusion and sustainable development in India, in alignment with the country’s national financial inclusion strategy."

According to the Reserve Bank of India, shortfalls of 45 million houses for economically weaker communities and 50 million for low-income groups account for 95% of India’s overall housing deficit. These groups often struggle to access credit due to high mortgage costs and limited credit history. This highlights the necessity for affordable housing finance companies that provide loans to new borrowers and self-employed individuals in rural and semi-urban areas.

Sandeep Menon, Founder, MD & CEO, Vastu, said, "Vastu is poised to expand our reach and deepen our impact in extending affordable housing finance to the credit-underserved segments, with a focus on women borrowers. We are glad to partner with ADB to further this vision. Together, we aim to bridge the credit gap for India’s emerging middle-class and lower-income households.”

Vastu is a technology-driven affordable housing finance company that focuses on self-employed customers in growing peri-urban and rural cities and towns. With a strong presence in semi-urban and rural areas, Vastu offers affordable housing loans and loans against property, emphasizing sustainability and financial inclusion.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 69 members—49 from the region.