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The International Finance Corporation has decided to invest up to INR 300 crore, equivalent to around USD 30 million, in residential mortgage-backed securities issued by Grihum Housing Finance. The move is aimed at boosting home ownership among low- and middle-income families by mobilising private capital for affordable mortgage lending. The investment also marks IFC's first exposure to India's RMBS market and aligns with the government's broader housing-for-all objectives.
To strengthen access to home ownership for low- and middle-income households, the International Finance Corporation (IFC) has decided to invest up to INR 300 crore, or about USD 30 million, in residential mortgage-backed securities (RMBS) issued by Grihum Housing Finance, an affordable housing finance company. The investment is intended to channel long-term funding into the affordable housing segment while supporting the development of India's RMBS market. Advertisement
The RMBS issuance has been structured to attract private capital into affordable mortgage lending by converting pools of residential home loans into tradable securities. Such instruments enable housing finance providers to access market-based funding with longer tenures, while also helping improve affordability for end borrowers and expanding participation from a wider set of investors.
This marks IFC's first investment in RMBS in India and is aligned with the central government's housing-for-all programme. IFC has indicated that the initiative forms part of its broader approach to improving access to housing and housing finance through scalable and sustainable solutions, working across both the supply and financing sides of the housing ecosystem.
By adopting a replenishing structure, the investment is expected to transform irregular loan cash flows into more predictable income streams, making the securities suitable for a broader investor base. This is seen as a step towards deepening the domestic securitisation market and strengthening long-term funding options for affordable housing finance companies.
The partnership with Grihum Housing Finance is also expected to support job creation and contribute to the overall resilience of the housing finance ecosystem. Grihum has stated that the use of capital market instruments such as RMBS will enhance efficiency and depth in housing finance, enabling more families to access affordable home loans.
Alongside this initiative, IFC continues to collaborate with developers to increase the supply of affordable housing units and with banks and housing finance companies to expand mortgage credit availability, reinforcing efforts to make home ownership more accessible across the country.
Source - PTI
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