The Asian Development Bank (ADB) and Vastu Housing Finance Corporation Limited (Vastu) have signed a senior secured loan agreement worth up to $70 million to improve access to affordable and sustainable housing in India’s underserved states. The partnership is focused on providing housing loans to economically weaker sections (EWS) and low-income groups, with a particular emphasis on female borrowers. At least 15% of the funding will be reserved for first-time borrowers, reflecting a commitment to inclusivity and financial empowerment.
Suzanne Gaboury, Director General of ADB’s Private Sector Operations Department, highlighted the importance of this collaboration: “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. 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.”
The housing shortage in India is significant, with the Reserve Bank of India estimating a deficit of 45 million houses for economically weaker communities and 50 million for low-income groups—making up 95% of the country’s overall housing deficit. These groups often face challenges in accessing credit due to high mortgage costs and limited credit histories. Affordable housing finance companies like Vastu play a critical role in bridging this gap by offering loans to self-employed individuals and new borrowers in rural and semi-urban areas.
Sandeep Menon, Founder, MD & CEO of Vastu, expressed optimism about the collaboration: “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 leverages technology to provide housing finance solutions tailored to self-employed customers in peri-urban and rural areas. The company offers affordable housing loans and loans against property while emphasizing sustainability and financial inclusion.
ADB, established in 1966 and owned by 69 members, remains committed to creating a prosperous, inclusive, resilient, and sustainable Asia-Pacific region. This partnership is another step toward achieving that goal while addressing India’s pressing housing needs.
