ECL Finance Ltd and Central Bank of India have inked an agreement for priority sector lending to Micro, Small and Medium Enterprise (MSME) customers.
The partnership comes into effect post the Reserve Bank of India (RBI) announcement on progressive Co-Origination Policy in September 2018, permitting banks and Non-Banking Financial Companies (NBFCs) to co-lend to a wider set of enterprise owners, said a BSE filing by Edelweiss Group.
ECL Finance Ltd, is a subsidiary of Edelweiss Financial Services.
“This is the first such co-origination partnership of Central Bank of India with an NBFC,” it said.
The partnership aims to enable speedy disbursal of credit across a group of products, including machinery and business loans, it said.
Powered by technology, the alliance will ensure strong underwriting for originations, positively influencing the credit-worthiness of MSMEs in over 100 cities in India, it said.
Many MSMEs face difficulties due to high interest rates or are barred from access to banking services, given geographical inaccessibility, it said.
“Through this innovative model of lending, MSMEs will now enjoy a blended lower rate of interest, translating into lower cost of funds, helping them deploy capital more effectively in their business,” it said.
“This partnership shall enable us to collaborate and harness technology, bring in the best practices in credit underwriting finer pricing and render a far superior experience in terms of turnaround time to customers,” said Pallav Mohapatra, CEO, Central Bank of India.