India’s largest lender State Bank of India (SBI) has entered into a co-lending agreement with five housing finance companies (HFCs) — PNB Housing Finance Ltd, IIFL Home Finance Ltd, Shriram Housing Finance Ltd, Edelweiss Housing Finance Ltd, and Capri Global Housing Finance Ltd — to sanction home loans to the unserved and underserved sector.
As per the lender, 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.
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″.
RBI had issued guidelines on the co-lending scheme for banks and HFCs/NBFCs for priority sector lending 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.
The partnership agreement, signed in Mumbai, was handed over by Khara to the respective heads of the HFCs as mentioned above.