HDFC Hikes Deployment Towards Green And Affordable Housing

Housing Development Finance Corporation (HDFC) is a non-banking financial company that provides financing by way of loans for the purchase or construction of residential houses in India. HDFC’s focus area is affordable housing, including lending to the economically weaker sections, low-income group and middle-income groups. The company reported a gross income of Rs 1,39,071 crore and net profit of Rs 18,740 crore in FY21. HDFC has a combined customer base of over 140 million, employs 270,000 people and 400,000 agents located across 46,000 offices, outlets, ATMs and touch points.  

In FY21, in volume terms 48 per cent of loans approved were to the middle-income group, 27 per cent to the low-income group, 19 per cent to the high-income group and 6 per cent to the economically weaker section. The company has the largest number of home loan customers of more than 2.3 lakh who have availed benefits under the Credit Linked Subsidy Scheme, a component of the government’s flagship ‘Housing for All’ scheme. Of the housing loans disbursed in FY21, 70 per cent in value terms had women as owners of the property and 48 per cent were disbursed to first-time homebuyers.  

Sustainability strategy 
HDFC’s Risk Management Committee incorporates climate risk as a business risk. The company has established an environment and social policy framework and a social and environment management system for screening certain loans for their social and environment risk and impact. The proceeds from HDFC’s pools of funding received from multilateral agencies are used for on-lending to developers for green and affordable housing where there is enhanced environmental and social due diligence on aspects like pollution prevention, water permits, reporting on fatalities or injuries, labour codes, amongst others. It is also among the few financial companies in India that has been reporting to the Carbon Disclosure Project.  

Green and affordable housing 
HDFC has received refinancing from the National Housing Bank and the French Development Agency under the “Sustainable Use of Natural Resources and Energy Finance” scheme that is earmarked for lending towards affordable and green housing. It has signed an MoU with the Indian Green Building Council to promote and encourage developers to opt for green buildings and nearly two-thirds of the company’s lease rental discounting portfolio entail green buildings. HDFC has recently launched green deposits for retail depositors the funds from which will be deployed towards green and other sustainability initiatives.  

Working with employees and stakeholders 
The company is running an internal campaign on ESG for employees and their families called ‘Hope Begins at Home’. The objective is to encourage climate-conscious decisions in the lives of employees and create more ESG champions in the organisation. The company also conducts a series of training workshops for all channel partners and key partners through webinars to train them on optimising digital platforms and keep them abreast of the latest developments in the organisation.