Chennai, India, January 5, 2000 -
The International Finance Corporation will become an equity partner in Sundaram Home Finance Limited (SHF), a new private housing finance institution that will help address the lack of mortgage financing for India's growing lower-middle and middle income households.
IFC will make an equity investment of about $2.3 million for 20 percent of SHF share capital. Sundaram Finance Limited of India, the main promoter, is also making an equity investment of about $7.5 million. An international financial institution and another domestic entity are also expected to join in SHF's shareholding.
There is considerable unmet demand for housing finance in India spurred by an increasing population as well as rapid urbanization. This investment will help address the massive needs for housing investments both at the institutional level and by increasing the supply of long-term financing, said Mr. Rashad-Rudolf Kaldany, IFC's Director for South and Southeast Asia who signed for IFC. New housing finance should, in turn, encourage investment and employment in the construction industry and in other municipal infrastructure such as roads, water works, and power, generally improving standards of living, he added.
Mr. S. Viji, Vice Chairman of Sundaram Finance, signed on behalf of Sundaram Finance a major multi-faceted finance firm in India. The company is a leader in truck and car financing with a large established distribution network. Mr. Viji said that Sundaram Finance has grown over the past four decades on foundations of dedicated customer service, fair business practices and prudent financial policies and that the same philosophies would guide the new venture.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
