Swarna Pragati Housing Microfinance Private Limited, India’s first housing microfinance institution, has raised Rs 50 crore in debt funding from the State Bank of India, the country’s largest bank. A pioneer in rural housing finance, Swarna Pragati helps Indians overcome traditional barriers to home ownership and improvement, ultimately increasing families’ access to better health, education, and job prospects.

Today, an estimated 450 million people lack safe and secure homes in rural India. The government’s Pradhan Mantri Awas Yojana-Gramin programme will help provide quality housing to at least 30 million households in rural India over the next five years. Nearly 90 million rural households are semi-pucca, semi-kutcha or kutcha dwellings that do not provide a safe and permanent place for individuals and families to live. Many of these households lack the proper legal documentation to secure financing for home improvements such as better roofing, flooring, doors, and windows.

Swarna Pragati makes financing more accessible for historically underserved populations including women and low-income and rural communities. Unlike other lenders, Swarna Pragati does not insist on formal land titles to guarantee the loan and instead is willing to consider alternative types of collateral which it terms as para-legal title. The company’s innovative incremental housing loans are larger and longer-term than typical microfinance loans, allowing people to make critical upgrades to their homes before structural issues worsen. The company also works with NGO staff to hand deliver loans and collect monthly installments from borrowers, helping rural families save time and avoid travel expenses.

“The affordable housing market presents an unprecedented opportunity in India right now for the rural housing credit market,” said Ramesh Kumar, Chairman and Managing Director of Swarna Pragati. “With the help of the State Bank of India and our others funders, we’re redefining an industry by putting the needs of the consumer at the center of what we do, helping thousands of families reach their full potential.”

To date, the company has provided over INR 1700 million in housing finance to more than 17,000 borrowers across India, including in the states of Maharashtra, Odisha, Karnataka, Tamil Nadu, and West Bengal.

The latest round of funding comes after a 2015 Series B funding round from Zephyr Peacock, Omidyar Network, Aavishkaar Ventures, and Asha Impact. The new funding from the State Bank of India will be used to grow Swarna Pragati’s loan portfolio, strengthening its presence in the rural affordable housing market.

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