⇒ Strategic alliance to expand affordable housing finance reach across underserved regions in India
Mumbai | May 26, 2025: Star Housing Finance Ltd (BSE: 539017), a retail-focused housing finance company specializing in low-ticket home loans, has kick-started its co-lending partnership with Vastu Housing Finance Corporation Limited, India’s leading affordable housing finance company. This collaboration aims to assist over 5,000 first-time home buyers across multiple Indian states, with a focus on semi-urban and rural markets.
The partnership reflects both organizations’ shared mission of advancing financial inclusion by offering accessible and affordable home financing to economically weaker sections (EWS) and low-income groups (LIG), particularly those traditionally excluded from the formal credit system.
Through this co-lending model, Star HFL will be responsible for loan origination, underwriting, and servicing in line with all extant regulations. Vastu HFC will contribute capital support, participate in co-underwriting, and offer a robust technology platform and risk-sharing framework – enabling both institutions to scale operations while managing risk efficiently.
“This partnership marks a significant milestone in Star HFL’s growth journey,” said Mr. Kalpesh Dave, Director & CEO of Star Housing Finance Ltd. “We deeply value the trust Vastu HFC has placed in us and look forward to leveraging their decade-long expertise and institutional capabilities. This alliance enhances our value proposition and supports our goal of delivering home ownership opportunities to underserved communities.”
Mr. Sujay Patil, Chief Financial Officer of Vastu Housing Finance Corporation Ltd., added, “We are excited to collaborate with Star HFL to drive financial inclusion and foster a sustainable affordable housing ecosystem. By sharing technology infrastructure and risk management frameworks, we aim to collectively fast-track progress on India’s affordable housing agenda.”
The affordable housing sector in India is experiencing robust demand, with over 95% of the urban housing shortfall concentrated in EWS and LIG categories, alongside a rural deficit of 43.7 million units. Despite supportive schemes like PMAY, many potential borrowers still face challenges accessing formal credit due to informal income structures and lack of documentation.
NBFC-HFCs such as Star HFL play a critical role in bridging this gap, with average loan sizes ranging between ₹8-15 lakh. With the market poised to grow to ₹20-25 trillion by 2030 at a CAGR of 20-25%, such partnerships are crucial for scaling impact, strengthening credit portfolios, and deepening reach into Tier 2, Tier 3, and rural markets.
