Ex-Ante Evaluation (for Japanese ODA Loan)
Private Sector Partnership and Finance Department, JICA
1. Name of the ProjectCountry: India
Project: Project for Affordable Housing Finance for Low Income Households (Facility forAccelerating Financial Inclusion in Asia)
Loan Agreement: April 3, 2020
Borrower: PNB Housing Finance Limited (PNB Housing)
2. Background and Necessity of the Project(1) Current Status and Issues of the Housing Sector in India
In India, housing shortages are a serious challenge. 275 million people (about 22% of thetotal population) are currently unable to acquire quality housing, and 90% of the housing
shortages are for low-income households. In addition, in India, urbanization is progressing
rapidly, and since the urbanization rate is estimated to reach about 40% by 2030. Hence,
the improving access to housing for low to medium income households in urban areas isbecoming an urgent issue to be addressed1.
The Government of India has announced “Housing for All,” the goal of supplying houses for
all people of the country by 2022, and worked out a set of supply and demand side measures
known as “Pradhan Mantri Awas Yojana (PMAY),” which means “Prime Minister HousingScheme.” On the demand side, the government will grant subsidies to cover the principal ofa loan and its interest so that people can purchase a house in each household income
category2. In the supply side, the government introduced a system under which, a subsidy
of 150,000 rupees per house for the Economically Weaker Section (EWS) is paid to a
housing developer that builds more than 250 houses of which more than 35% are designed
for EWS households whose annual income is 300,000 rupees (about 4,200 dollars) or less.
However, if seen from the demand side, housing loans to GDP ratio still remain at around
10.3%, lower than in other countries3, with the funding gap in housing loans estimated at 141Source: United Nations Population FundIn the PMAY project, the Indian government defines the income categories of households to be subsidized
as follows:
Economically Weaker Section (EWS): households whose annual income is 300,000 rupees (about 4,200dollars) or less
Low Income Group (LIG): households whose annual income is over 300,000 rupees and 600,000 rupees(about 8,400 dollars) or less
Middle Income Group I (MIG I): households whose annual income is over 600,000 rupees and 1.2 million
rupees (about 16,900 dollars) or less
Middle Income Group II (MIG II): households whose annual income is over 1.2 million rupees and 1.8 million
rupees (about 25,300 dollars) or less3
The housing loans to GDP ratio is 18% for China, 20% for Thailand, 34% for Malaysia, and 63% for theUnited States.
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billion dollars4, and it is necessary to further expand the housing loans, particularly thosethat help low-income households to purchase a house. The Project, which aims at providing
more housing loans to low-income households (EWS and LIG) through PNB Housing, anon-bank financial institution, which specializes in housing finance, is in accord with theissues of this sector and the Government of India’s policy.
(2) Japan’s and JICA’s Policy for the Housing Sector in India and the Priority of the ProjectJapan’s Country Assistance Policy for India (March 2016) states that Japan will strive toimprove fundamental social services with a focus on supporting sustainable, comprehensive
growth. The JICA Country Analysis Paper for India (March 2018) views responding to therapid progress of urbanization as JICA’s priority issue. In his statement at the 2019 JapanASEAN Summit, the Japanese Prime Minister emphasized that Japan was committed to
doubling JICA’s Private Sector Investment Finance aimed primarily at greater financial
access and support for women in the regions around ASEAN. The Project corresponds withthe above-mentioned policy and analysis because it is intended to improve low-income
households’ access to housing loans and help them to obtain a house. It also correspondswith the G7 2X Challenge: Financing for Women5 because the percentage of women as theprimary borrower or as one of joint borrowers is high, at 84%.
3. Project Description(1) Project Objective
By providing long-term finance to India’s PNB Housing, which provides housing loans, theProject aims at improving low-income households’ access to housing loans, thus
contributing to the improvement of low-income households’ lives and sustainable economic
growth in the country.
(2) Project Site/Target Area
Entire India (excluding disputed areas)(3) Project Component
Improve low-income households’ access to housing loans through long-term finance to PNB
Housing(4) Environmental and Social Consideration/Gender Category① Social Considerationa) Category: CSource: India’s Eleventh Five-Year Plan
The G7 Summit held in June 2018 announced that development financial institutions in the G7 countries,including JICA, would adopt the 2X Challenge: Financing for Women and strive to mobilize funds of threebillion dollars by 2020 for projects that contribute to the economic empowerment of women.
45b) Reason for Categorization:
It is judged under the JICA Environmental and Social Considerations Guideline
published in April 2010 that the undesirable effects of the Project on the environment
are minimized.
c) Other:Funds are used for housing loans to low-income households. JICA has agreementwith PNB Housing in finance documents that PNB Housing uses JICA’s proceeds
only for sub projects that meet the JICA Environmental Category C standards.
② Gender Category: Gender project ■GI (S) (Gender activity integration project)<Reason for Categorization> The percentage of women as the primary borrower or as
one of the joint borrowers at PNB Housing is high, at 84% and it is expected to increase
women’s asset ownership and contribute to the economic empowerment of women. TheProject is in accord with the requirements of the G7 2X Challenge: Financing for Women,
which aims at developing female entrepreneurs and business leaders and promoting
the economic empowerment of women such as the entry of women into the labor market.
(5) Other Important Issues
The Project involves co-financing with Citibank.
4. Targeted Outcomes(1) Quantitative Effects
The balance of housing loans for EWS and LIG, the number of EWS and LIG housing loanborrowers, and the percentage of female borrowers will be measured.
(2) Qualitative Effects
Low-income households’ access to housing loans is expected to be improved.
5. Lessons Learned from Past Projects(1) Results of Evaluation of Similar Projects
It is reported that in the Micro Enterprise Assistance Project for the Arab Republic of Egypt
rate of loan repayment was very high. The results of ex-post evaluation and other data
indicate that in developing similar projects to support financing for micro and small
enterprises, it is important that financiers have (i) rich financing experience and (ii) manybranches to understand the creditworthiness of customers spread in the country.
(2) Lessons for the ProjectIn the due diligence process, PNB Housing’s financing experience and branch system waschecked and it is confirmed that the PNB Housing has sufficient ability to implement theProject.

6. Evaluation Results
The Project is aligned with the development issues and development policy of India and isconsistent with Japan's and JICA's development cooperation policies. It will contribute to theimprovement of low-income households’ lives and sustainable economic growth in thecountry by providing housing loans to low-income households, and is expected to help
achieve SDGs Goals: Goal 1 (Poverty Alleviation), Goal 5 (Gender Equality), Goal 8 (Accessto financial services), Goal 11 (Sustainable Cities and Communities), and Goal 17(Partnerships for the Goals). Accordingly, there is a substantial need for JICA to support theProject with Private Sector Investment Finance.
7. Plan for Future Evaluation(1) Indicators to be Used
As described in Section 4. (1) above(2) Timing
Ex-post evaluation: Two years after project completion.
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