Bank of India (BOI) has entered into a co-lending partnership with Vijayawada-based IKF Finance to offer commercial vehicle loans.
The public sector bank will leverage the reach of the non-banking finance company (NBFC) to build its micro, small and medium enterprise (MSME) portfolio, per a statement.
“As part of this co-lending tie up, IKF Finance, through its diversified network of branches across nine states, will originate and process loans to vehicle finance borrowers as per mutually agreed credit parameters with the bank,” said IKF Finance.
The NBFC is backed by Motilal Oswal Private Equity.
The co-lending model was announced by the RBI to increase credit flow to the unserved and underserved sector by utilising NBFCs’ reach to the informal sector while leveraging banks’ competitive cost of capital.
Vasumathi Koganti, Managing Director, IKF Finance, said: “As we scale up to more than ₹10,000 crore assets under management over the next few years, such (co-lending) arrangements will help us channelise credit better and offer cost efficient vehicle financing solutions to various borrower segments.”
Incorporated in 1991 as Indra Keela Financiers, IKF Finance is primarily engaged in the business of vehicle and SME segment financing. It has consolidated assets under management of about ₹2,000 crore.