For Priority Sector Lending to MSME customers
ECL Finance, a subsidiary of Edelweiss Financial Services and Central Bank of India signed an agreement for Priority Sector Lending to Micro, Small and Medium Enterprise (MSME) customers.The partnership comes after the Reserve Bank of India announced the progressive Co-Origination Policy in September 2018, allowing banks and NBFCs to co-lend to a wider set of enterprise owners. This is the first such Co-Origination partnership of Central Bank of India with an NBFC.
With this alliance, Edelweiss and Central Bank of India, aim to create a conducive lending environment and democratise access to credit. For Central Bank of India, this partnership significantly raises its lending profile in the priority sector, through efficient risk mitigation. Edelweiss, on the other hand, brings its expertise in the credit business, to underserved customers in hard-to-reach markets in tier II and tier III cities. The partnership, hence, combines the strengths of Central Bank of India and Edelweiss, creating a win-win situation for both with maximum benefit being transmitted to the customer.
The partnership aims to facilitate speedy disbursal of credit across a bouquet of products, including machinery and business loans. Enabled by technology, the alliance will ensure robust underwriting for originations, positively impacting the creditworthiness of MSMEs, in over 100 cities in India. Many MSMEs face challenges of high interest rates or are excluded from access to banking services, given geographical inaccessibility. Through this innovative model of lending, MSMEs will now enjoy a blended lower rate of interest, translating into a lower cost of funds, helping them deploy capital more effectively in their business.
Powered by Capital Market - Live News