ECL Finance, a subsidiary of Edelweiss Financial Services, State Bank of India (SBI) have signed a co-origination agreement to increase access to credit for micro, small and medium enterprises (MSMEs).
This is the third co-origination MoU in quick succession for Edelweiss after the Bank of Baroda and Central Bank of India.
Pursuant to Reserve Bank of India's (RBI) guidelines on co-origination of loans by banks and NBFCs, the alliances aim to leverage combined reach in tier II and tier III markets to ensure timely disbursal of credit to MSMEs.
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.
"We believe that revival is possible only by making credit available to this vital contributor of the Indian economy," said Chairman and CEO of Edelweiss Group Rashesh Shah. "Edelweiss and SBI are collaborating to make reasonably priced credit accessible for the priority sector segment," he said in a statement on Thursday.
P K Gupta, Managing Director (MD) of SBI's Digital and Retail Banking the partnership will boost credit availability to the MSME community which contributes substantially to the GDP.
The wide reach of SBI will give access to cost-effective loans to the MSME sector in non-metros," he said.
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