ADB Signs USD 108 Million Financing Deal with Aavas Financiers to Boost Affordable Housing and MSME Lending in India

Funding Package Targets Low-Income Households and Underserved States​

The Asian Development Bank on Tuesday signed a senior secured debt financing package of up to USD 108 million, approximately INR 983 crore, with Aavas Financiers Limited to expand access to affordable housing loans and business credit in underserved regions of India.

The financing aims to support low-income households seeking home loans and micro, small, and medium-sized enterprises requiring capital to grow operations. The initiative is designed to strengthen formal credit access in lagging states and improve financial inclusion.

Concessional Financing Through CANPA​

The package includes concessional debt financing of USD 8 million in Indian rupee equivalent through the Canadian Climate and Nature Fund for the Private Sector in Asia, a trust fund managed by ADB.

Established in 2024, CANPA is backed by a commitment of 360 million Canadian dollars from the Canadian government. The fund builds on earlier initiatives such as the Canadian Climate Fund for the Private Sector in Asia II and its predecessor, CFPS.

In addition to debt financing, the transaction is supported by up to USD 150,000 in technical assistance. This assistance will focus on strengthening institutional capacity and increasing awareness of green housing solutions in the market.

Focus on Climate-Resilient and Green Housing​

A significant portion of the financing will be directed toward self-built and green-certified homes. The initiative seeks to promote climate-resilient and energy-efficient housing solutions for low- and middle-income borrowers.

At least 70 per cent of the ADB debt financing will support housing loans for low-income borrowers. Of these housing loans, 50 per cent will be extended to women property owners, either as sole or joint owners. The remaining 30 per cent of the financing will be directed toward MSMEs to encourage entrepreneurship and job creation.

Emphasis on Inclusive and Gender-Responsive Growth​

ADB Country Director for India Mio Oka said the institution’s support is intended to unlock formal credit for underserved families and entrepreneurs while accelerating the transition toward climate-aligned and gender-responsive housing finance.

By focusing deployment in lagging states and prioritizing women property owners, the project seeks to advance inclusive growth and resilience across communities.

Agreement Signed by Key Stakeholders​

The agreement was signed by Isabel Chatterton, Director General of ADB’s Private Sector Operations Department, Sachinder Bhinder, Managing Director and Chief Executive Officer of Aavas Financiers Limited, and Phedra Moon Morris, Representative from Global Affairs Canada.

The financing arrangement marks a coordinated effort to expand affordable housing access, strengthen MSME lending, and promote sustainable development across underserved regions of India.