ECL Finance, the flagship non-banking financial company of Edelweiss Group, and Bank of Baroda, India's second largest public sector bank, on Wednesday, signed an agreement to form a strategic partnership to explore co-lending opportunities.
Both entities will jointly offer loans and expertise for the growing needs of micro, small and medium enterprises besides self-employed as well as priority sector groups.
Under the arrangement, both partners can widen their respective markets and offer timely delivery of credit to customers at a significantly lower cost.
Chairman and CEO of Edelweiss Group Rashesh Shah said he is delighted to be partnering with Bank of Baroda in increasing the reach of credit to service the needs of a large section of India.
"I do believe that this model of partnership between banks and NBFCs is here to stay, truly democratising access to credit," he added.
Bank of Baroda's Executive Director Vikramaditya Singh Khichi said the SME sector is the backbone of the Indian economy, providing millions of jobs and contributing a significant chunk to industrial growth and the country's exports.
"There is a huge potential that is untapped in the SME space. Co-lending partnerships between large organisations like Bank of Baroda and leading players in finance like Edelweiss will contribute to the overall enhancement of the SME industry, as these enterprises need funding for adopting new technology that will enhance their growth and in turn, boost India's economic growth."
The credit business has been a significant growth engine for the Edelweiss Group with the retail credit segment having grown to 50 per cent of the total book at over Rs 18,000 crore at the end of 2018-19. The business has both size and scalability with a growing presence pan India.
The overall credit business has remained resilient amid tough market conditions due to the sheer strength of its diversified business model, robust risk mitigation and credit assessment as well as superior asset quality and low non-performing asset levels.
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