IFC Partners with Grihum Housing Finance to Expand Affordable Homeownership and Deepen India’s Securitization Market

Mumbai, December 18, 2025 - To boost homeownership among low- and middle-income families across India, IFC is investing up to INR 3 billion (approximately US$30 million) in Residential Mortgage-Backed Securities (RMBS) issued by Grihum Housing Finance Limited ('Grihum'), an affordable housing finance company. The issuance is designed to catalyze private capital for affordable mortgage lending while advancing India's RMBS market.

RMBS instruments are securities backed by pools of retail residential mortgages. They allow housing finance providers to convert loan cash flows into tradable securities, giving them access to market-based, longer-tenor funding, while also enhancing affordability for end-customers and broadening investor participation.

This is IFC's first investment in RMBS in India, aligned with the Government of India's Pradhan Mantri Awas Yojana initiative to ensure housing for all.

The partnership will enable Grihum to expand responsible and affordable housing finance for first-time homebuyers in low and middle income segments, especially in semi-urban and peri-urban areas, while also driving job creation. By diversifying Grihum's long-term funding base and mobilizing additional institutional investors, the transaction will enable more families to secure affordable home loans.

"India's growing demand for affordable housing, with an estimated 275 million people aspiring to improve living conditions. This, with the NHB's support and enablement, underscores the vast opportunity to deepen financial inclusion and economic growth. The partnership reinforces our shared mission of expanding affordable homeownership in support of the Government's agenda. The innovative use of capital market instruments, such as RMBS's, helps to enhance the efficiency and depth of India's housing finance ecosystem-thereby enabling more families to realize their dream of owning a home," said Arjun Chowdhry, CEO, Grihum Housing Finance.

"Our anchor investment is designed to expand affordable homeownership, especially for first-time buyers in underserved low- and middle-income segments, while building market confidence in India's RMBS offerings. As part of our One World Bank Group engagement in the housing sector, IFC's programmatic approach focuses on improving access to both housing and housing finance, through affordable, scalable, long-term solutions. This means working together with both developers to provide affordable housing units and with banks/housing finance companies to expand access to credit for home buyers. By adopting a replenishing structure, the investment transforms loan cash flows into a more predictable pattern, making it suitable for a wider range of investors and contributing to the development and growth of the RMBS market. This partnership with Grihum aims to create jobs and market solutions that mobilize private capital and strengthen the housing finance ecosystem to make homeownership a reality for families across the country," said Imad N Fakhoury, Regional Division Director for South Asia, IFC.

Complementing government efforts, IFC is collaborating with developers to support the provision of affordable housing units, and banks and housing finance companies (HFCs) to ensure greater access to credit for mortgages, enabling more families to secure affordable home loans.

The partnership is a key step, leveraging innovation to bridge the housing finance gap and build a stronger, more inclusive housing sector.