Country’s largest lender State Bank of India (SBI) has signed a Master Agreement with Vedika Credit Capital Ltd (VCCL), Save Microfinance Pvt Ltd (SMPL) and Paisalo Digital Ltd (PDL), for co-lending to individual members of Joint Liability Groups (JLG) to undertake agriculture and allied activities including other income generation activities.
With these partnerships, SBI would be able to further increase its reach in the rural and semi-urban areas of the country offering small ticket loans. SBI is actively looking at Co-lending opportunities with multiple NBFCs / NBFC-MFIs for financing Farm Mechanisation, Warehouse Receipt Finance, Farmer Producer Organisations (FPOs), etc., for enhancing credit flow to double the farmers’/indivduals’ income.
Shri Dinesh Khara, Chairman said “Co-lending will be pursued as an important tool to increase the micro finance, MSME and affordable housing portfolio. As a first step, we are pleased to announce such arrangement with VCCL, SMPL and PDL for lending to JLGs. We believe this initiative will financially empower millions of people and will augment bank’s vast distribution Network. This will also encourage entrepreneurship among the underserved population which in-turn will provide a boost to the Indian economy. We will continue to work with more NBFCs / NBFC MFIs, in order to reach out to maximum customers staying at far flung areas and provide last mile banking services.”
RBI had issued guidelines on Co-lending scheme for banks and NBFCs / NBFC-MFIs for Priority Sector Lending to improve the flow of credit to unserved and underserved sectors of economy and to make funds available to borrowers at an affordable cost. The co-lending model aims to give the borrower the best interest rate and better reach.