SBI's co-lending ventures with NBFCs revolutionizing access to credit

BNE News Desk

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New Delhi: The State Bank of India (SBI) has forged partnerships with 23 non-banking finance companies (NBFCs) and housing finance companies (HFCs) to broaden the bank's outreach and cater to the needs of those traditionally excluded from mainstream banking.

A pivotal development in this endeavour is the launch of a comprehensive digital platform facilitating end-to-end processes of credit underwriting, sanction, disbursement, and collections for NBFC co-lending. Leveraging this platform, SBI has sanctioned loans totalling Rs 2,030 crore to over 2.79 lakh borrowers. Impressively, the majority of these accounts, exceeding 2.70 lakh, were sanctioned entirely through digitized channels, particularly for loans up to Rs 3 lakh.

Notably, within the spectrum of co-lending, SBI has sanctioned loans to 1,042 micro, small, and medium enterprise (MSME) accounts amounting to Rs 469 crore in collaboration with 9 NBFCs as of March 31, 2024. The relationship with NBFCs is believed to have augmented SBI's ability to penetrate local markets.

Moreover, this collaboration enables NBFCs to originate loans across various sectors, including agriculture, SMEs, and housing, thereby contributing to the creation of priority sector assets in alignment with predetermined agreements.

Integral to this transformative initiative is SBI's adoption of a cutting-edge digital co-lending platform hosted on the public cloud infrastructure of Amazon Web Services. This marks a significant milestone as the bank's inaugural business application deployed on the public cloud, illustrating its embrace of technological innovation to streamline operations and enhance efficiency. The integration of this platform with YUBI exemplifies the power of collaboration between a major bank and an agile fintech entity, underscoring a paradigm shift in the lending landscape.

Furthermore, SBI's proactive stance towards financing Farmer Producer Organizations (FPOs) underscores its commitment to agricultural development. Through multiple FPO Connect Programmes conducted during the fiscal year 2024, the bank aims to empower rural communities and catalyze economic growth in agrarian regions.

In parallel, SBI's subsidiary, State Bank Operation Support Services (SBOSS), has emerged as a cornerstone in extending banking services to rural and semi-urban areas. Operating on a "High Tech, High Touch, and Low Cost" model, SBOSS has facilitated the sourcing of over 6.70 lakh new Kisan Credit Card (KCC) loans amounting to staggering Rs 13,500 crore.

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BNE News Desk