Godrej Finance Limited (GFL) has entered a co-lending partnership with Muthoot FinCorp to enhance credit access for Micro Small and Medium Enterprises (MSMEs) in Tier-2 and Tier-3 cities. This partnership leverages Muthoot FinCorp’s extensive market presence and deep reach in these regions to provide much-needed financial support to growing businesses.
The co-lending agreement focuses on offering Loan Against Property (LAP) ranging from INR 10 lakh to INR 75 lakh, with an average ticket size of INR 15 lakh. This product is designed to serve MSMEs across pan-India markets where demand for timely and accessible credit is strong. Plans include expanding the partnership to cover other products such as gold loans and housing loans.
The collaboration features a seamless digital integration that aims to speed up loan approvals, enhance transparency, and ensure full compliance with the Reserve Bank of India’s (RBI) co-lending framework. Under this agreement, Godrej Finance assumes 80 percent of the credit risk, while Muthoot FinCorp manages the remaining 20 percent. Muthoot FinCorp will take responsibility for underwriting, loan collections, and managing the overall customer experience. Godrej Finance will ensure regulatory compliance through a jointly defined policy framework.
Manish Shah, MD & CEO of Godrej Capital, highlighted the importance of timely credit in enabling business growth, especially in smaller cities. He emphasized that this partnership aims to bridge credit gaps for MSMEs by providing faster, simpler, and transparent lending options that help businesses flourish and contribute to a more inclusive financial ecosystem.
Muthoot FinCorp CEO Shaji Varghese reaffirmed the vital role MSMEs play in India’s employment landscape, second only to agriculture, and acknowledged the challenge they face in accessing credit. With over 3,700 branches and its Muthoot FinCorp ONE app, the company is well-positioned to extend financial services to underserved areas, and the loan against property offering through this partnership will further strengthen MSME growth.
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GFL, through Godrej Finance, already offers a diverse portfolio of business loan products, including unsecured business loans and the Udyog Loan Against Property for smaller financing needs. The partnership expects to disburse INR 250 crore in the current fiscal year with a strong focus on high-potential markets in Northern, Southern, and Western India.
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