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IIFL Home Fin has entered into a strategic co-lending partnership with State Bank of India to accelerate effective and affordable credit to small home buyers in the country.
IIFL HFL, a digital-first home finance company, has signed an agreement with SBI for co-lending of priority-sector home loans.
"This is SBI's first co-lending agreement with a home finance company. The loan sourcing and servicing will be managed by IIFL HFL. Under the arrangement, 80 per cent of the loan will be provided by SBI," it said in a release on Thursday.
IIFL HFL will service the customers throughout their entire loan cycle, from sourcing, documentation, disbursal to collection.
This will help the company to penetrate further into the affordable home loan segment. This arrangement will also help the company in offering attractive interest rates to its customers.
"This collaboration will enhance our distribution network, as we aim to extend our credit reach to more home loan borrowers in unserved and underserved segments. Such partnerships align with our commitment to accelerate effective and affordable credit to small home buyers in India and contribute to the vision of Housing for All by 2024," Dinesh Kumar Khara, SBI Chairman said.
Earlier this year, IIFL HFL signed agreements with Union Bank for extending home loans, Central Bank of India for LIG and MIG sector loans and Punjab National Bank for extending home loans and MSME loans.
It also partnered with foreign-based Standard Chartered Bank for extending credit to MSME loans.
"We are looking forward to further strengthening our foothold in the affordable home space with co-lending. With this association, we target to align our goals with the government's agenda of improving the flow of credit and make funds available to the ultimate beneficiary at an affordable cost," Monu Ratra, CEO & ED, IIFL HFL said.
The company has disbursed loans totaling Rs 1,500 crore till February 28, 2022 under the existing co-lending arrangements.
In November 2020, the Reserve Bank of India (RBI) came out with the Co-Lending Model (CLM) scheme under which banks can provide loans along with NBFCs to priority sector borrowers based on a prior agreement.
The CLM, is an improvement over the co-origination of loan schemes announced by RBI in September 2018. It seeks to provide greater flexibility to the lending institutions, according to the apex bank.
The co-origination model required the NBFCs to take minimum 20 per cent of the credit risk through direct exposure to the priority sector and that their contribution towards the loan amount would not be funded out of borrowing from the co-originating bank or any other group company of the partner bank.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Thu, March 24 2022. 17:58 IST