The International Finance Corporation (IFC), the private-investment arm of the World Bank Group, recently approved a loan of USD 250 million to Housing Development Finance Corporation Limited (HDFC), a housing lender based in India. Whereas green housing has “largely been regarded as a luxury market in the country,” one quarter of the loan amount is reserved for funding homes with features such as solar panels, low-flow water fixtures and energy-efficient appliances for households earning less than INR 75,000 (USD 1,010) monthly.
In addition to improving families’ living conditions, other goals of the loan include creating construction jobs; working toward the Indian government’s vision of “housing for all”; and making progress toward India’s goal under the Paris Agreement, “to reduce a third of carbon emissions by 2030 from 2005 levels.”
HDFC, which was founded in 1994, offers a range of loan types, including for home purchases and home improvements. The firm reports having financed 8.4 million houses since its inception, and it also holds INR 1.5 trillion (USD 20.7 billion) for depositors as of 2021. Beyond India, it provides consulting services in 18 countries in Asia, Africa and Eastern Europe. The firm closed the 2021 fiscal year with INR 5.7 trillion (USD 77 billion) in assets under management.
IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. During the 2020 fiscal year, IFC reported total disbursements of USD 26 billion, closing the period with total assets of USD 96 billion.
The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2021, it has 189 member nations. The group encompasses: (1) the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank; (2) IFC; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2020, the World Bank Group disbursed funds totaling USD 54 billion.
By Arin Atluri, Research Associate
Sources and Additional Resources
IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=26526
HDFC homepage
https://www.hdfc.com/
HDFC financials
https://www.hdfc.com/sites/default/files/2021-08/press-release-june.pdf
IFC annual report 2020
https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/annual+report/download
World Bank Group homepage
https://www.worldbank.org/
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