India's largest lender State Bank of India (SBI) announced on Thursday that it has entered into a co-lending agreement with 5 Housing Finance Companies (HFCs) to sanction home loans to the unserved and underserved sector in line with the Reserve Bank of India (RBI) guidelines.
The 5 HFCs are: PNB Housing Finance Limited, IIFL Home Finance Limited, Shriram Housing Finance Limited, Edelweiss Housing Finance Limited, and Capri Global Housing Finance Limited.
The partnership agreement, which was signed in Mumbai, was handed over by SBI's chairman, Dinesh Khara, to the respective heads of the HFCs as mentioned above.
SBI, in an official statement, noted that the shortage in affordable housing continues to be a major concern for India, especially for the Economically Weaker Section (EWS) and the informal sections of the society. It added that to improve the penetration in this segment, it is actively looking at co-lending opportunities with multiple HFCs.
Speaking on this partnership, Dinesh Khara, Chairman, SBI, said, "We are glad to have joined hands with the HFCs under the co-lending program. 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".
Earlier, RBI had issued guidelines on the co-lending scheme for banks and HFCs/NBFCs for Priority Sector Lending (PSL) to improve the flow of credit to the unserved and underserved sectors of the economy and make funds available to borrowers at an affordable cost. The co-lending model aims to give the borrower the best interest rate and better reach.
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