IFC to commit $40m to India's Repco

IFC's investment is intended to help Repco increase its penetration in the country's affordable housing finance sector. The company will use the new capital to provide loans to low-income individuals seeking to buy, build or improve their homes, especially in tier-two and tier-three cities outside of south India, according to a disclosure.

Repco focuses on serving low-income borrowers, particularly self-employed entrepreneurs and workers being paid informally who lack credit history. Investing in the company helps to meet IFC's development goals both in terms of providing housing to economically weak populations and encouraging the creation of jobs in the construction industry. It also contributes to the goal of India's government to construct 100 million new homes by 2022.

Repco Home Finance was founded in 2000 as the mortgage finance unit of Repco Bank. The firm has had several PE backers in the past, including Creador and Wolfensohn Capital, each of which bought part of a stake held by the Carlyle Group in 2013; Carlyle had bought its stake in 2008.

All three GPs have since fully exited the company: Wolfensohn sold its 3.5 million shares in 2014 for INR1.12 billion, with Carlyle and Creador following later that year.

IFC has shown increasing interest in India's housing finance sector lately. In 2015, it formed a $200 million joint venture with Standard Chartered Private Equity, the Asian Development Bank, and real estate giant Shapoorji Pallonji to develop 20 million square feet of affordable housing across seven cities in India, and last month it announced it would invest up to $38 million in three housing finance companies in the country.

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• Topics
• South Asia
• Financials
• Expansion
• India
• IFC
• Growth capital
• NBFCs