Paisalo Digital jumped 4.74% to Rs 927.70 after the State Bank of India signed a service level agreement with the company for engagement as National Business Correspondent of the bank.
Business correspondents are retail agents engaged by banks for providing banking services at various locations. They enable a bank to expand its outreach and offer range of banking services at low cost, as against setting up a brick and mortar branch which may not be viable in all cases.
Accordingly, the company will be responsible for promoting financial inclusion by providing banking services through kiosks.
Towards this objective of promoting financial inclusion and increasing the outreach, PaisaloDigital shall extend its services and reach to the vast under serviced segments of the market, especially in semi-urban and rural parts of India.
As a national business correspondent for State Bank of India, the company will focus on building greater synergies and a more aggressive roll out of their already up and running fully digital small loan business under SBI-Paisalo Loan Co-origination.
Santanu Agarwal, Deputy CEO, Paisalo Digital, shares, "Paisalo sees huge opportunity and is well positioned to capitalise on the huge Rs 8 lakh crore market of small ticket loans for our 365 million of under banked and under serviced population. This engagement will, besides promoting greater synergies and enabling a faster rollout of our joint digital lending products, also help increase Paisalo's fee and service income in future.
Together with our fully digital SBI-Paisalo Loan Co-Origination Scheme, this is a big step forward in Paisalo's goal of creating the most competitive seamless banking solution for India's bottom of pyramid population.
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As on 30 June 2021, the State Bank of India and the SBI Life Insurance Company held 2.54% stake and 13.17% in the company, respectively.
Separately, Paisalo Digital said that the operations and finance committee of the board has approved the allotment of fifteen unlisted, unsecured, unrated redeemable, non-convertible debentures (NCDs) of Rs 1 crore each on a private placement basis.
The NCDs bear a coupon rate of 12% per annum. The instruments were allotted on 27 September 2021 and the tenure of the same is five years from the date of allotment.
Paisalo Digital is a non-deposit taking NBFC registered with the Reserve Bank of India. The company primarily extends business loans to SME/corporates and income generation loans to individuals.
The company's consolidated net profit rose 12.4% to Rs 16.94 crore on a 5.9% increase in total income to Rs 91.69 crore in Q1 FY22 over Q1 FY21.
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