The State Bank of India (SBI) announced that it has entered into a co-lending agreement with 5 Home Finance Companies (HFCs) to promote home loans. The agreement with PNB Housing Finance Ltd., IIFL Home Finance Ltd., Shriram Housing Finance Ltd., Edelweiss Housing Finance Ltd. and Capri Global Housing Finance Ltd. would help sanction home loans to the unserved and underserved sectors in line with RBI guidelines, the lender said.
“The lack of affordable housing remains a major problem for India, especially for the economically vulnerable sections (EWS) and the informal sections of society. To further improve market penetration in this segment, SBI is actively seeking co-lending opportunities with multiple HFCs,” the bank said in a statement.
“This collaboration will enhance our distribution network as we aim to expand our lending reach to more home borrowers from the unserved and underserved segments,” said Chairman Dinesh Khara.
“Such partnerships are consistent with our commitment to accelerate effective and affordable lending for small homebuyers in India and contribute to the Housing for All vision by 2024,” he said.
The RBI had issued guidelines on the co-lending program for banks and HFCs/NBFCs for senior sector loans 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 aim of the co-lending model is to offer the borrower the best interest rate and better range according to the lender.