MoF’s SWAMIH Fund

MoF’s SWAMIH Fund

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March 15, 2023

Special Window for Affordable and Mid-income Housing (SWAMIH) is an investment fund that is sponsored by the Ministry of Finance to complete stalled and stressed residential projects. Some other details are as follows:

• It is the biggest social impact fund which was started in 2019 and has completed 20,557 homes.

• Till date, it has managed to provide Rs. 15,530 Crore as funding to real estate developers for unfinished projects so that they can deliver homes to homebuyers within the stated period.

• SBICAP ventures is the investment manager of this fund. SBICAP Ventures is a wholly-owned subsidiary of SBI Capital Markets while the latter is a wholly-owned subsidiary of State Bank of India (SBI).

• SWAMIH is registered with the Securities and Exchange Board of India (SEBI) as it comes under Category – II AIF (Alternate Investment Fund).

• This fund is believed to be the best money lender for distressed projects because it considers recognised builders with stressed projects, NPA accounts and customer complaints, first time builders, builders with poor record of delayed projects and even those projects that are entangled in legal issues.

Project Selection Criteria - Projects receive funding from the fund as per the following criteria:

• Delayed due to lack of funds

• Projects under the ambit of Affordable Housing* scheme

• Registered with Real Estate Regulatory Authority (RERA)

• Preference for projects nearing completion

Networth Positive Projects** (including projects under NCLT proceedings and NPAs)

* Housing units are defined as mid-income or affordable when they are within 200 square meter RERA carpet area and as per the following cost:

• Below Rs. 2 Crore in Mumbai Metropolitan Area ;

• Below Rs. 1.5 Crore in Chennai, Pune, Bangalore, NCR, Kolkata, Ahmadabad and Hyderabad;

• Below Rs. 1 Crore in rest of India

** If the value of unsold inventories and receivables (debts through buyers) is more than the outstanding liabilities and completion costs, such projects are called Networth Positive Projects.

Impact

• 130 projects have been finally approved and sanctions more than Rs. 12,000 Crore has been provided by SWAMIH. 26 projects have completed their construction and generated returns for investors.

• In the next three years, the aim is to complete 81,000 homes in tier 1 and 2 cities.

• Additionally, it will encourage allied industries like cement and steel and provide employment to building workers.

Source - The Indian Express