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ECL Finance Limited, a subsidiary of Edelweiss Financial Services Limited and State Bank of India (SBI) have signed a co-origination agreement, which aims to increase access to credit for micro, small and medium enterprises.
“The alliance aims to leverage combined reach in tier II and tier III markets to ensure timely disbursal of credit to MSMEs,” the company said in a statement, adding that the partnership comes close on the heels of SBI setting up a special NBFC Alliance department to step up lending to the priority sector.
It plans to provide business loans, machinery loans and SME asset-backed loans ranging from Rs 3 lakh to Rs 50 lakh at a blended rate of interest.
For Edelweiss, co-origination represents an alternate model of disbursals that is asset-light and creates a sound revenue model through fee income while SBI would provide capital at low costs.
This is the third co-origination agreement for Edelweiss, after Bank of Baroda and Central Bank of India.
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