BOSTON and BANGALORE, India, Nov. 28, 2012 -- /PRNewswire/ -- Accion, a pioneer and leader in bringing financial services to the underserved, today announced that its Frontier Investments Group along with Saama Capital, an India venture focused investment firm, has invested US$4 million in Shubham Housing Development Finance Company, headquartered in Gurgaon, India. Shubham's mission is to provide mortgages and home-improvement loans to low-income families in urban areas of India. Frontier Investments and Saama Capital join current investors Elevar Equity and Helion Venture Capital in this second-round capitalization, totaling US $8 million.
As the Indian economy expands, more people are migrating to urban areas; 350 million Indians live in cities today, a figure predicted to double by 2030. Housing is particularly affected by the urban explosion as nearly 50 percent of India's city-dwellers are forced into sub-standard housing accommodations as real estate prices increase and affordability declines.
Shubham's goal is to provide mortgages and home-improvement loans for quality housing, to individuals typically excluded from formal financial systems. With operations in 17 locations across seven Indian states, Shubham has already helped hundreds of low-income customers through its interview-based method of lending, which goes beyond the traditional document-based approach and leverages new technology to address the unique needs of poorer populations.
"Shubham's innovative operating model has the potential to change the way significant numbers of urban Indians live – by delivering critical financial services to self-employed, low-income people," said Monica Brand, head of Accion's Frontier Investments, an early-and growth-stage equity vehicle that invests in breakthrough innovations that can enhance financial service delivery to the under-and unbanked. "We are thrilled to partner with a high-efficiency, forward-thinking provider who shares our vision of economic access for all."