SBI join hands with 5 HFCs to further affordable housing to unserved borrowers
Premium- The co-lending agreements between SBI and five HFCs are expected to contribute to the government's vision for 'Housing for All by 2024’.
India's largest lender, State Bank of India (SBI) has entered into a co-lending agreement with five major housing finance companies to further affordable housing to the underserved and unserved borrowers. These HFCs are PNB Housing Finance, IIFL Home Finance, Shriram Housing Finance, Edelweiss Housing Finance, and Capri Global Housing Finance.
The co-lending agreements between SBI and five HFCs are expected to contribute to the government's vision for 'Housing for All by 2024’.
Dinesh Kumar Khara, SBI Chairman said, “This collaboration will enhance our distribution network, as we aim to extend our credit reach to more Home Loan borrowers of the unserved and underserved segments. Such partnerships align with our commitment to accelerate effective and affordable credit to small home buyers in India and contribute to the vision of “Housing for All by 2024".
In another statement, Shriram Housing Finance highlighted that the company will target priority sector housing loans in the affordable housing segment under this co-lending arrangement with SBI. Shriram Housing Finance will originate, process, and service the loans.
Ravi Subramanian, MD & CEO of Shriram Housing Finance said “The demand for housing is immense in the affordable segment and we have barely scratched the surface. We are extremely excited to partner with SBI and together we would be able to serve a much larger customer base, especially borrowers at the bottom of the pyramid. Through the co-lending model, we intend to leverage the balance sheet strength of SBI and our underwriting capabilities."
Meanwhile, PNB Housing in a statement said, PNB Housing and SBI will combine their capabilities to provide an efficient and seamless experience to both existing and new retail home-loan customers. PNB Housing will service customers throughout the loan lifecycle, including sourcing, documentation, and collection, under an agreed information-sharing arrangement with SBI. The agreement will enable PNB Housing to provide lending solutions to customers at competitive rates of interest with significant benefits.
PNB Housing Finance Managing Director and CEO Hardayal Prasad said, “Our strategic partnership with SBI is an important extension of our retail home loan segment and will enable us to serve India’s working classes and underserved communities better. This co-lending agreement will advance our mission to provide affordable housing to a large section of the population and help them realize their goal of owning their dream home. Co-lending is the future of priority sector lending, as it reduces the cost of financing for last-mile borrowers. It will allow us to offer our affordable home loan products at competitive interest rates through a quick and seamless process. The partnership will also fast-track business growth and add significant value to customer engagement."
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Both PNB Housing and Shriram Housing also said separately that two entities will jointly service housing loan customers as per the 20:80 co-lending model (CLM) of the Reserve Bank of India (RBI).
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