Edelweiss teams up with SBI for Co-Origination of Loans to MSMEs

Alliance to democratize access to credit for Priority Sector Lending to MSMEs

Business Loans, Machinery Loans & SME Asset-Backed Loans to range from INR 3 lacs to INR 50 lacs, at a blended rate of interest

This is the third Co-Origination MoU in quick succession for Edelweiss, after Bank of Baroda and Central Bank of India

 

Mumbai – ECL Finance Limited, a subsidiary of Edelweiss Financial Services Limited and State Bank of India (SBI), India’s largest bank, have signed a Co-Origination agreement to increase access to credit for Micro, Small and Medium Enterprises (MSMEs). Pursuant to Reserve Bank of India’s (RBI) guidelines on co-origination of loans by banks and NBFCs, the alliance aims to leverage combined reach in tier II and tier III markets to ensure timely disbursal of credit to MSMEs.

This collaboration involves the sharing of risks and rewards between Banks and NBFCs and is a win-win for all involved parties; MSME customers, Banks and Edelweiss, creating a lending environment that truly democratizes credit flows to an important socio-economic segment. The partnership between SBI and Edelweiss comes close on the heels of SBI setting up a special NBFC Alliance department to step up lending to the priority sector.

For Edelweiss, Co-Origination represents an alternate model of disbursals that is asset light and creates a sound revenue model through fee income. SBI brings capital flows at low costs, which when combined with Edelweiss’ expertise, would be able to meet the credit needs of MSME customers. For MSME customers, this translates into easy access to credit at lower rates, given a specialized blended rate of interest.