Swarna Pragati Housing Microfinance raises Rs 21 crore from Aavishkaar Goodwell and existing investors

Swarna Pragati Housing Microfinance has closed a new round of equity financing totalling to Rs 21 crore. The round is led by Aavishkaar Goodwell, one of the country’s largest social venture funds. Existing investor- Asia Pragati, a NBFC backed by PAG (Pacific Alliance Group), has also participated in this round.

Having succeeded in piloting its innovative and unique housing microfinance model, Swarna will use the capital infusion to strengthen its presence in Maharashtra, Orissa, Karnataka and Tamil Nadu, as well as to expand into other states.

Promoted by a team of senior bankers led by A. Ramesh Kumar, former CGM, State Bank of India and Chairman of NABARD’s National Committee on Rural Habitat, Swarna Pragati Housing Microfinance has a portfolio of Rs 18.5 crore. Founded in 2011, the company has a customer base of over 3,000 borrowers, and has a targets to cater to one lakh households by 2018. The company has innovated housing finance and mortgage systems to overcome the hindrances that impede the flow of credit to the rural segment. It leverages the grassroots community institutions to evolve simple, flexible cost effective and fault proof mechanisms for administration of housing finance to this segment. The company’s model in the housing sector and has made housing finance accessible for the marginalised sections with special focus on rural dwellings. The housing loans are provided both for fresh construction and for renovation/repairs/up-gradation of existing houses.

Under the Swarna Pragati model low-income families build their houses one step at a time in a process known as incremental housing or progressive build. They add water and sanitation facilities to a basic house, improve flooring, roofing and gradually add new rooms. This incremental build concept is in the design of housing microfinance products by Swarna Pragati. In addition; the company has introduced the concept of paralegal documentation to provide access to housing finance to families without a fool-proof document of title to their property.

Speaking about the investment, Vineet Rai of Aavishkaar Goodwell said, “We are excited about our partnership with Swarna Pragati on account of its excellent management team with a strong social consciousness, focus towards under-served areas and their unique partnership model.”

Kumar, chairman and MD, Swarna Pragati Housing Microfinance said, “Aavishkaar has been one of the foremost institutions to show interest and confidence in our innovative affordable housing finance model. We find Aavishkaar to be one of the best investors to support companies dedicated towards creating social impact in rural India.”