The World Bank Group, a US-based international financial institution; the National Housing Bank (NHB), an Indian bank and regulatory authority; and the government of India recently signed a USD 100 million credit agreement for a Low-Income Housing Finance Project, which will aim to improve accessibility to housing loans for low-income households in India to purchase, build or renovate homes. The World Bank’s lending arm that offers interest-free credits and grants, the International Development Association (IDA), will finance the project.
NHB will execute the Low-Income Housing Finance Project, which has three components. The first component is to provide an unspecified amount of financial support for “affordable and sustainable housing” by refinancing housing loans previously made to low-income borrowers. The second project component is to strengthen capacity through the development of loan standards, risk management tools, alternative forms of capital and financial literacy and consumer protection systems. The third component is project implementation, in which a Project Implementation Unit will be created within NHB to help implement, monitor and evaluate the Low-Income Housing Finance Project [1].
As of June 2012, the World Bank Group had an active grant and loan portfolio of USD 173 billion. NHB’s total assets for year-end 2012 were INR 31,300 crore (USD 4.92 billion). For the fiscal year ending in June 2012, IDA provided monetary assistance of approximately USD 14.8 billion through 160 operations across 82 countries. As of 2012, IDA reported total assets of USD 160 billion.
By Adrija Vaiciulionis, Research Associate
About World Bank Group:
The World Bank Group (WBG) is a US-based development bank that consists of five institutions, all of which are owned by its member countries. The Group’s mission is to improve living standards for people in the developing world. The World Bank Group encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). WBG has 120,000 employees and operations in approximately 120 countries as of July 2013 and an active grant and loan portfolio of USD 173 billion as of June 2012.
About International Development Association (IDA):
Established in 1960, the International Development Agency (IDA) is the arm of the World Bank Group that provides interest-free credits and grants for programs in the world’s poorest countries. Loans from IDA have repayment terms stretching over 35 to 40 years, including a 10-year grace period. IDA also provides grants to countries at risk of debt distress. During the fiscal year ending in June 2012, IDA provided monetary assistance of approximately USD 14.8 billion through 160 operations across 82 countries. As of 2012, IDA reported total assets of USD 160 billion, total equity of USD 137 billion.
About National Housing Bank:
The National Housing Bank (NHB) was created in 1988 and owned by the Reserve Bank of India (RBI), India’s central bank. NHB is a state-owned bank and regulatory authority headquartered in the city of New Delhi, India. NHB promotes private real estate ownership and regulates, monitors and re-finances social housing programs.
Sources and Additional Resources:
World Bank Press Release, August 14, 2013: “Gov of India and World Bank Sign $100 Million Agreement to Help Low-Income Families Secure Housing Loans,” http://www.worldbank.org/en/news/press-release/2013/08/14/india-government-of-india-world-bank-sign-agreement-to-help-low-income-families-secure-housing-loans
[1]World Bank Project: India Low-Income Housing Finance
http://www.worldbank.org/projects/P119039/india-financing-affordable-housing?lang=en
Srivastava,Ishan. “India Signs Agreement with World Bank for Low Income Housing Finance Project,” The Times of India, August, 16, 2013 http://timesofindia.indiatimes.com/business/india-business/India-signs-agreement-with-World-Bank-for-low-income-housing-finance-project/articleshow/21864132.cms
MicroCapital Story, May 7, 2013: “MICROCAPITAL BRIEF: Reserve Bank of India Aims to Increase Financial Inclusion in Unbanked Areas; Number of Indian Villages with Financial Access Tripled to 211k,” https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-aims-to-increase-financial-inclusion-in-unbanked-areas-number-of-indian-villages-with-financial-access-tripled-to-211k/
MicroCapital Story, April 9, 2012 “MICROCAPITAL BRIEF: First Phase of India’s 2011 Census: 40% of Households Do Not Have Access to Banking Services, 5% of Villages Have Banks,” https://www.microcapital.org/microcapital-brief-first-phase-of-indias-2011-census-40-of-households-do-not-have-access-to-banking-services-5-of-villages-have-banks/
MicroCapital Universe: World Bank Group
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group
MicroCapital Universe: International Development Association (IDA)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Development+Association+%28IDA%29
MicroCapital Universe: National Housing Bank (NHB)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Housing+Bank+%28NHB%29
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