IFC provides $200mn financing to HDFC

In a transaction that is expected to further develop India's housing finance market, the International Finance Corporation has provided a financing package of US $200 million to Housing Development Finance Corporation.

The package comprises two loans of $100 million each for IFC's own account and for the account of participant banks.

The loans are integral to IFC's strategy to assist in the expansion of financial markets in India and, in particular, to promote access to housing finance by middle and lower middle income households, an IFC release said.

The investment will also help to extend the tenor of funding available to HDFC from the international markets. In the year to June 30, 2003, IFC is committed to invest up to $388 million in projects in India, the release said.

"IFC is delighted to partner with HDFC, a model institution operating at global financial and operational best practice standards," IFC Director Global Financial Markets, Karl Voltaire said.

"We also look forward to working with HDFC in a future partnership to develop the secondary mortgage market in India," Voltaire said.

"This transaction will establish a new standard for tenor of funding available to an Indian financial institution from the international markets and will enable us to extend our reach and enhance our capacity to serve India's growing middle-income households," HDFC chairman Deepak Parekh said.

IFC Director for South Asia, Dimitris Tsitsiragos, added, "Access to housing finance is a critical aspect of IFC's objective of developing India's financial sector."