IFC Raises India Investment Size To $350 M This Fiscal

Bangalore, May 21: | Updated: May 22 2003, 05:30am hrs
Impressed with the surge in the Indian economy, the International Finance Corporation (IFC), Washington, has raised its annual investments in India to $350 million for 2003-04 from the previous years $160 million.

IFC is particularly impressed with the countrys manufacturing and housing finance sectors. It has expressed optimism of India becoming the second fastest growing economy after China, and decided to provide funds to manufacturing, housing finance, information technology and animation, infrastructure and agriculture sectors during the current fiscal and for the next decade.

On the sidelines of WBs Annual Bank Conference on Development Economics (ABCDE) here, Mr Neil Gregory, IFC head (strategy and co-ordination unit), told FE that IFC would float a separate company within a year for providing mortgage guarantee to any housing finance company. The proposed company would provide higher mortgage value.

Mr Gregory said that IFC, through the proposed company, would also help housing companies to recycle their finances. IFC is of the view that housing will be the fastest growing sector in India. Thus, a decision has been taken to increase its investment in housing finance companies which, in turn, would become competitive and be able to provide loans to the middle- income group, he added.

According to Mr Gregory, IFCs past experience in India was quite positive and it has lent funds to Apollo Tyres, Cosmo Film, Usha Beltron. IFC was in the midst of finalising a loan of nearly $50 million to engineering major Larsen & Toubro (L&T) for carrying out operational and financial restructuring.

IFC has cleared a $20-million loan to Birla Home Finance (BHF) to facilitate expansion of its mortgage loans to credit-worthy clients that are constructing, acquiring and improving residential properties. The IFC loan would strengthen BHFs balance sheet by augmenting critical long funding available to the company.

IFC has also approved $12 million to Dewan Housing and $15 million to Sundaram Housing Finance. Mr Gre-gory said that IFC would also like to focus on fast growing information technology and animation sector in India.