IFC Invests INR 3 Billion in RMBS to Expand Affordable Housing in India

The investment aims to unlock greater private capital for affordable mortgage lending and accelerate the growth of India’s RMBS market.

In a major push to strengthen homeownership among low- and middle-income families across India, the International Finance Corporation (IFC) has announced an investment of up to INR 3 billion (approximately US$30 million) in Residential Mortgage-Backed Securities (RMBS) issued by Grihum Housing Finance Limited, a leading affordable housing finance company. The investment aims to unlock greater private capital for affordable mortgage lending and accelerate the growth of India’s RMBS market.

RMBS instruments are backed by pools of retail residential mortgages, enabling housing finance companies to convert long-term loan repayments into tradable securities. This provides lenders access to longer-tenor, market-based funding, decreases their cost of capital, and expands the availability of affordable home loans for underserved households. By deepening investor participation, RMBS can help scale sustainable, transparent housing finance in India.

IFC’s First-Ever RMBS Investment in India

This marks IFC’s first RMBS investment in India, aligning closely with the Government of India’s Pradhan Mantri Awas Yojana (PMAY) initiative, which aims to ensure Housing for All. The collaboration with Grihum will boost responsible mortgage lending for first-time homebuyers, especially low- and middle-income families residing in semi-urban and peri-urban areas—regions where the need for affordable housing is rapidly increasing.

The investment is expected to strengthen Grihum’s long-term funding stability, diversify its capital sources and attract additional institutional investors to the affordable housing segment. The resulting expansion in mortgage supply will make home loans more accessible for households that have historically struggled to qualify for formal credit.

A Growing Opportunity in India’s Housing Finance Ecosystem

India continues to witness rising demand for affordable housing, with an estimated 275 million people aspiring to improve their living conditions. Grihum CEO Arjun Chowdhry noted that the collaboration—supported by the National Housing Bank (NHB)—highlights the vast potential to increase financial inclusion and drive economic development.

“The innovative use of capital market instruments such as RMBS enhances efficiency and depth across India’s housing finance ecosystem, enabling more families to realize their dream of homeownership,” Chowdhry said.

IFC’s Broader, Long-Term Strategy for Housing Access

Imad N. Fakhoury, IFC’s Regional Division Director for South Asia, emphasized the strategic intent behind the partnership. Through its “One World Bank Group” approach, IFC is investing in integrated solutions that benefit both the supply and demand sides of the housing market.

“Our anchor investment will expand affordable homeownership—especially for first-time buyers—and build market confidence in India’s RMBS offerings,” said Fakhoury. He explained that IFC’s replenishing structure allows loan cash flows to be transformed into predictable patterns, making RMBS suitable for a broader set of investors and helping deepen India’s capital markets.

Beyond this transaction, IFC is working closely with developers to increase the supply of affordable housing units and collaborating with banks and housing finance companies to extend mortgage access. Together, these efforts support job creation, mobilize private capital and strengthen the housing finance ecosystem—ultimately enabling millions of Indian families to aspire to, and attain, secure homeownership.