Kochi-based Muthoot Microfin has formed a strategic co-lending partnership with the State Bank of India (SBI) to extend financial services to women entrepreneurs in rural and semi-urban areas across India. This collaboration focuses on providing loans to members of Joint Liability Groups (JLGs), who are engaged in agricultural, allied activities, and various income-generating enterprises. The loan amounts will range from a minimum of Rs 10,000 to a maximum of Rs 3,00,000.
The initiative aims to empower women entrepreneurs in rural regions, enabling them to grow their businesses and contribute to local economies. "With this partnership, we will be able to offer a wide range of products and services to our clients. Most importantly, it will help us meet the growing demand of our women entrepreneur clients in a cost-effective manner," said Sadaf Sayeed, CEO of Muthoot Microfin.
SBI's co-lending partnerships are designed to enhance credit accessibility in underserved and priority sectors. By collaborating with Non-Banking Financial Companies (NBFCs), SBI leverages its lower cost of funds alongside the extensive local reach of NBFCs. To qualify for such collaborations, NBFCs must meet specific criteria, including a minimum credit rating of A (-), sufficient assets under management, and a strong net worth to ensure financial stability.
Under this partnership, NBFCs like Muthoot Microfin act as the single interface for customers, managing loan disbursements and handling customer-related issues, while SBI reimburses them for loan operations. This approach combines the strengths of both entities, facilitating broader financial inclusion and providing much-needed support to women entrepreneurs in rural and semi-urban regions. This co-lending model is expected to significantly boost the local economies by empowering women to expand their enterprises and achieve financial independence.