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The co-lending model of NBFCs & banks may reshape credit delivery. Will it?

A problem which is now being worked upon is to how to marry the low cost of funds from banks with the lower cost of operations of NBFCs and pass this on to borrowers through a blended rate

Abhijit Lele & Raghu Mohan 

It is lift-off time for the co-origination of loans by banks and non-banking financial companies (NBFCs). If the model were to fly, it has the potential to reshape the delivery of credit — early estimates peg the annual incremental flow at Rs 25,000 crore.

But will it? The operational part was flagged off on September 21, 2018, but it is only now that the building blocks are coming into view. The reason: the greater part of this time was taken up by the principals involved to dance around issues after the blowout in shadow banking; and iron out finer aspects of the model. Just ...

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First Published: Tue, December 31 2019. 21:55 IST
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