This 5 year project financing facility provides Ackruti City Limited with early stage funding that was not available from other sources. Most slums exist illegally on municipal land and thus banks approached by slum dwellers and developers are not able to receive pledge of the land as security. The process of acquiring ownership rights over the land is lengthy and not without risk. Ambiguity in the application of local regulations prohibiting acquisition of land further adds to the local banks discomfort.
Frontier Markets Fund Managers played an active role in structuring the financing and GuarantCo’s partial credit guarantee enabled the facility to be increased by over 40%, thus helping it achieve critical size.
Nearly half of Mumbai’s 15 million inhabitants live in slums. They have limited access to basic amenities like clean water and sanitation and have no security of tenure.
GuarantCo’s support is helping to re-house up to 30,000 families in small but permanent flats with access to clean water, sanitation, electricity and clear legal title. This will greatly improve living conditions and the life chances of children in particular. Unlike many schemes, the initiative is voluntary and community led.
Such is the high value of land in Mumbai that developers are prepared to provide free, quality housing on the same site to slum communities, in exchange for permission to develop & sell part of the freed up land.