NEW DELHI: ECL Finance Ltd, a subsidiary of Edelweiss Financial Services, and Central Bank of India have 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 progressive Co-Origination Policy in September 2018, allowing banks and NBFCs to co-lend to a wider set of enterprise owners, a BSE filing by Edelweiss Group said."This is the first such co-origination partnership of Central Bank of India with an NBFC," it said.
The partnership aims to facilitate speedy disbursal of credit across a bouquet of products, including machinery and business loans, it said. Enabled by technology, the alliance will ensure robust underwriting for originations, positively impacting the credit-worthiness of MSMEs in over 100 cities in India, it said.
Many MSMEs face challenges of high-interest rates or are excluded from access to banking services, given geographical inaccessibility, it said. "Through this innovative model of lending, MSMEs will now enjoy a blended lower rate of interest, translating into lower cost of funds, helping them deploy capital more effectively in their business," it said.
Speaking on the development, Central Bank of India MD and CEO Pallav Mohapatra said: "This partnership shall enable us to collaborate and harness technology, bring in the best practices in credit underwriting finer pricing and render a far superior experience in terms of turnaround time to customers"