SBI Partners with 5 Housing Finance Companies to Provide Affordable Loans to the Unserved
The country’s largest lender, the State Bank of India (SBI), announced on Thursday that it has entered into co-loan agreements with five housing finance companies to serve underserved and unserved borrowers.
The five housing finance companies (HFCs) are: PNB Housing Finance, IIFL Home Finance, Shriram Housing Finance, Edelweiss Housing Finance and Capri Global Housing Finance.
The SBI said the partnerships are aimed at sanctioning home loans to the unserved and underserved sector in line with RBI guidelines.
Shortage of affordable housing continues to be a major concern for India, especially for the economically weaker section (EWS) and informal sections of society, SBI said in a statement.
To further enhance penetration in this segment, SBI is actively seeking co-lending opportunities with multiple HFCs.
“This collaboration will enhance our distribution network as we aim to expand our credit reach to more home loan borrowers from the unserved and underserved segments. Such partnerships align with our commitment to accelerating effective and affordable credit for small home buyers in India,” said SBI Chairman Dinesh Khara.
He said the ties will contribute to the government’s vision of “housing for all by 2024”.
The RBI had issued guidelines on the co-loan scheme for banks and HFC/NBFC for lending to priority sectors to improve the flow of credit to unserved and underserved sectors of the economy and put funds available to borrowers at an affordable cost.
The co-loan model aims to provide the borrower with the best interest rate and reach, he said.
In a separate statement, Shriram Housing Finance said the two entities will jointly serve home loan clients under the RBI’s 20:80 co-loan model.
“The demand for housing is immense in the affordable segment and we have barely scratched the surface. Through the co-lending model, we intend to leverage SBI’s balance sheet strength and our underwriting capabilities,” said Ravi Subramanian, MD and CEO, Shriram Housing Finance.
Hardayal Prasad, Managing Director and CEO of PNB Housing Finance, said, “Our strategic partnership with SBI is an important extension of our retail housing lending segment and will allow us to better serve working class and underserved communities across the country. India. Co-lending is the future of priority sector lending because it lowers the cost of finance for last-mile borrowers, Prasad said.
Rajesh Sharma, Managing Director of Capri Global Housing Finance, said the partnership will help increase the profitability of both companies and expand the respective housing loan portfolios.
“We are confident that working with the nation’s largest lender will open up more home financing opportunities for every creditworthy borrower and act as an agent of change in realizing the dreams of owning a home,” Sharma said.