Co-Lending in Affordable Housing: A Strategic Growth Lever for Star Housing Finance

India’s housing story is fundamentally a story of inclusion, where home ownership remains a key aspiration and economic milestone for millions. For first-time homebuyers from low- and middle-income groups, especially in Tier 2, 3, and semi-urban India, affordable housing is more than just a sector; it is a socioeconomic movement.

Our mission at Star Housing Finance Ltd. (Star HFL) has always been to enable this aspiration. And as we look toward achieving scale and sustainable impact, the co-lending model has emerged as a critical and strategic growth lever that aligns with our vision to serve the underserved responsibly and efficiently.

 Why Co-Lending Works in Affordable Housing

The co-lending model allows a housing finance company like Star HFL to partner with banks and large financial institutions, combining their capital strength with our grassroots distribution, underwriting expertise, and domain knowledge of the affordable housing segment. This collaborative approach creates a powerful synergy, one that allows for greater credit penetration in geographies and borrower profiles traditionally considered high-risk or underserved.

Also Read: How to Choose the Perfect Luxury Home

From a structural perspective, the model enables both partners to share risk and returns in a regulated and transparent manner. For the borrower, this translates into better access to formal credit at competitive rates, while for lenders; it offers capital efficiency and a ready channel to meet their priority sector lending (PSL) targets.

Star HFL’s Strategic Push for Co-Lending

Star HFL has positioned co-lending not just as a funding option but as a core strategy to drive growth and deepen financial inclusion. Our early adoption of the model has resulted in strong collaborations with institutions such as Vastu Housing Finance and Tata Capital, among others. Our partnerships are founded on mutual trust, regulatory alignment, and shared purpose. These alliances are helping us increase disbursement velocity, diversify risk, and improve balance sheet strength—all while maintaining our high standards of asset quality and customer service.

These partnerships have allowed us to create co-branded loan products that are specifically tailored for low-income, self-employed, and first-time homebuyers, many of whom operate in the informal economy. We have steadily built operational frameworks with our partners that balance agility with compliance, ensuring smooth loan origination, disbursement, and servicing.

Also Read: 5 Best Cities For Real Estate Investment in India

The value proposition we bring to the table includes deep local knowledge and presence in semi-urban and rural locations, robust credit assessment models tailored to informal income groups, end-to-end digital onboarding and loan processing systems and strong asset monitoring and collection capabilities post-disbursement.

Our existing co-lending relationships have enabled us to expand our footprint across Maharashtra, Madhya Pradesh, Rajasthan, Gujarat, Tamil Nadu, Delhi NCR and other high-demand regions, with a clear focus on rural and semi-urban clusters where credit penetration remains low. Looking ahead, we are in advanced discussions with several other banks and NBFCs to deepen our co-lending ecosystem, diversify our liability base, and unlock higher scale and efficiency.

Aligning with the Vision of Housing for All in a New India

As India ascends to become the fourth-largest economy globally, housing continues to be a foundational element of inclusive development. The recent softening in the repo rate environment and broader macroeconomic optimism present a window of opportunity to enhance credit flow into the affordable housing sector. Co-lending, in this context, becomes even more imperative—not just as a risk-sharing model, but as an engine for broad-based growth.

Star HFL’s co-lending strategy directly aligns with the Government of India’s ambitious “Housing for All” vision and the financial inclusion agenda. With real estate and housing increasingly recognized as both economic drivers and instruments of social stability, it is critical to ensure that credit reaches where it is most needed: to the under banked. Through our model, we are not only helping families build homes but also enabling long-term wealth creation and community development.

Impact and Way Forward

Through the co-lending model, Star HFL has already expanded into newer markets and borrower segments with enhanced affordability and flexibility. The early results are promising, both in terms of portfolio performance and borrower satisfaction.

We intend to further strengthen this model by investing in technology and integrating advanced credit analytics, building seamless digital journeys, and fostering deeper partner engagement. At the same time, we will continue our focus on borrower education, helping customers better understand loan terms, repayment behavior, and their long-term financial responsibilities. We will leverage co-lending to deepen Star HFL’s contribution to inclusive urbanisation and rural housing upliftment.

Conclusion

In an evolving financial ecosystem where trust, agility, and impact matter most, co-lending is proving to be more than a funding innovation—it is a force multiplier for financial inclusion in affordable housing. At Star HFL, we believe this is not just the future of lending, but the future of responsible lending.

By building strategic partnerships, embracing technology, and staying true to our mission of housing for all, we are confident that co-lending will continue to power our next phase of growth—making home ownership not just a dream, but a reality for India’s aspiring millions.