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.
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