29300 - IMGC India

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Summary of Proposed Investment

Project Number

29300

Company Name

India Mortgage Guarantee Corporation Private Limited

Date SPI Disclosed

Nov 11, 2011

Country

India

Industry

Financial Markets

Projected Board Date

Dec 13, 2011

Status

Active

Sector

Mortgage Services and Other

Department

Global Industry, Financial Markets

Environmental Category

C - No Impact

Previous Events

Approved : Feb 2, 2012
Signed : Feb 3, 2012
Invested : Jun 25, 2012

Project Description

This proposed project (“IMGC India” or the “Project”) is an important part of IFC’s financial sector engagement in India, and involves an equity investment in India’s first mortgage guarantee company, proposed to be named as India Mortgage Guarantee Company (“IMGC” or the “Company”). IMGC is proposed to be established as Mortgage Guarantee Corporation to provide credit risk coverage to residential mortgage lenders in the event of a borrower’s default.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	8.60

Development Impact

This product is expected to enhance accessibility to affordable housing finance across income segments and regions through the provision of guarantees and support to the lenders. The proposed project will have development impact in the following areas:
- Increased home ownership for middle income households and first time buyers, and deepening the financial market for housing finance
- Increased activity in the housing sector
- Knowledge transfer to the company and the sector from the various sponsors of the company in helping develop the mortgage finance and guaranty market in India
- Risk Transfer: The mortgage guarantee product is expected to allow the banking system an new and effective avenue for risk diversification and would allow the institutional investors to participate in the very large mortgage market which would otherwise be closed to them.
-It will also lead to a standardization of lending practices.

IFC has played a strong role in this project and has been associated with this effort since the beginning. In the initial stages, IFC made a major contribution to the development of the project concept. This project has been developed as a private sector oriented institution to be run on commercial lines. IFC has played a facilitative role in order to balance the public and private sector participation in this company.

Although IFC has not invested in mortgage guarantee companies so far, IFC''s overall experience in the housing finance sector and in general financial institution building has proved valuable to all participants in the specific areas of project design, governance structures and financial evaluation. In the future, IFC may support IMGC through a program of counter-guarantees that would enable IMGC to expand its ability to support the mortgage guarantee sector in a financially effective manner.

IFC brings to the project a wide and deep range of financial institution building experience in emerging markets. IFC also has experience in a wide range of housing finance markets and in creating and investing in structured finance products and counter guarantee programs. These skill sets offer clear additionality to the project. IFC also has a broad network of relevant institutional relationships. The continued importance of IFC to the project is recognized by all the partners.

Contacts

For Inquiries About the Project, Contact

Alfred Orendorff
Genworth Financial International Holding
al.orendorff@genworth.com
Phone: 1 804 662 2534

Arnab Roy Executive Director National Housing Bank
Phone: 91-11-2464 7983
Fax: 91-11-2464 7754
e-mail: mailto:aroy@nhb.org.in

Robert van Zwieten,
Director,
Private Sector Capital Markets
Asian Development Bank
Phone: 632 632 4444.

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

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