Edelweiss Group, partner of the Central Bank of India to lend jointly to MSMEs
New Delhi, September 1 () ECL Finance Ltd, a subsidiary of Edelweiss Financial Services, and the Central Bank of India have signed an agreement for priority sector loans to clients of Micro, Small and Medium Enterprises (MSME).
The partnership comes after the Reserve Bank of India announced a progressive Co-Origination Policy in September 2018, which allows banks and NBFCs to jointly lend to a wider set of business owners, according to a BSE document from the Edelweiss Group.
This is the first co-origination association of the Central Bank of India with an NBFC, he said.
The association aims to facilitate the rapid disbursement of credit on a set of products, including machinery and commercial loans, he said.
Enabled by technology, the alliance will guarantee a solid subscription for originations, positively impacting the solvency of MSMEs in more than 100 cities in India, he said.
Many MSMEs face high interest rate challenges or are excluded from access to banking services, given geographic inaccessibility, he said.
Through this innovative loan model, MSMEs will now enjoy a lower combined interest rate, which will result in lower cost of funds, helping them to deploy capital more effectively in their businesses, he said. Speaking about the development, the MD and CEO of the Central Bank of India, Pallav Mohapatra, said: This partnership will allow us to collaborate and leverage technology, incorporate best practices in finer credit subscription prices and provide a much superior experience in Terms of response time for customers. RR RVK