Premium| Listen to this article |
Edelweiss Housing Finance Limited has announced a strategic co-lending partnership with Standard Chartered Bank for extending loans against property to prospective customers, especially MSMEs.
Under this partnership, EHFL will originate, process, service the loans and retain 20% of the loan on its books, while the remaining 80 % will be on the books of Standard Chartered Bank.
This partnership model will combine Standard Chartered Bank’s expertise in this segment with Edelweiss’ reach and strong origination capabilities, to improve the flow of credit at an attractive cost, according to the press release.
While, the Bank will be able to grow its loan portfolio, by leveraging EHFL’s origination, for EHFL, co-lending represents an alternate model for loan disbursals that is asset light and creates a sound revenue model for sustainable business. Customers will not only benefit from blended and cost-effective interest rates but will also find it operationally simple - dealing with a single entity end to end, the release added.
Aditya Mandloi, MD & Head, Business Banking, India, Standard Chartered Bank, said, “This partnership would help in leveraging the Bank’s diverse product offering along with the distribution strength and strong processing ability of Edelweiss to meet the financial needs within the MSME sector."
The new normal post covid-19 will need significant re-thinking in the way NBFCs and HFCs do business. The focus is seen to be shifting on liquidity management and asset-light models and the co-lending arrangement will fulfil precisely this need, as per the press release.
Rajat Avasthi, MD & CEO, EHFL, said, “We are happy to partner with a respected institution like Standard Chartered Bank and build a winning proposition for all stakeholders. This partnership acts as a cornerstone to our asset light growth business model as we look forward to fulfilling the increasing credit demand India is witnessing today."
Never miss a story! Stay connected and informed with Mint. Download our App Now!!