Edelweiss signs MoU with Central Bank of India to strengthen co-lending partnership

Edelweiss Retail Finance Limited (ERFL), a subsidiary of Edelweiss Group, announced today that it has signed a new memorandum of understanding (MoU) with Central Bank of India (CBoI). This strengthens its existing co-lending partnership with CBoI, which is one of the largest commercial banks for the priority sector lending to MSMEs (micro, small & medium enterprises) in the country.  

This MoU falls under RBI’s co-lending model (CLM), which states that banks will be permitted to co-lend with all registered non-banking finance companies (NBFCs) (including HFCs) based on a pre-determined agreement.  

The deal substantially expands the portfolio of lending products, which is available to MSMEs. They can now access collateral-free business loans up to Rs 50 lakh as against Rs 10 lakh earlier. In addition to this, they can also make use of loans against property (LAP) with property-backed collateral, up to Rs 10 crore. Furthermore, the lenders are working towards introducing specially designed products with increased loan limits for the MSME segment.  

This is a win-win deal for both the lenders as it results in boosting their collective strength by taking into account their individual proficiencies. Here, Edelweiss brings its prowess of loan origination and servicing capabilities comprising a digitally powered lending platform while Central Bank commands the strength of lower cost of funds. As a result, there will be an expansion of reach to underserved markets, and enabling priority sector borrowers to get credit at lower costs.  

At the time of market closing, the share price of Edelweiss Retail Finance Limited was trading at Rs 960, a rise of 0.92 per cent on NSE.