Small Industries Development Bank of India (SIDBI), the country’s apex financial institution for MSMEs, announced entering into its first co-lending arrangement with Ambit Finvest Pvt. Ltd., the Non-Banking Financial Company (NBFC) of the Ambit Group, to provide Unsecured Business Loans to MSMEs.
RBI’s Co-lending framework envisages leveraging the comparative advantages of banks and NBFCs in a collaborative effort to boost the priority sector lending.
Sivasubramanian Ramann, CMD, SIDBI said “NBFCs are an important vehicle in the growth strategy of SIDBI due to their willingness and ability to reach bottom of the pyramid businesses, especially in credit deficient geographies, adoption of innovative and nimble credit delivery models and understanding of the local ecosystem. While SIDBI has been providing financial assistance to a wider spectrum of NBFCs, under our new growth vision, we are looking at the co-lending framework put in place by the RBI as another major opportunity to channelize affordable and timely credit to the smallest of the MSMEs, especially New to Credit borrowers, in partnership with NBFCs.”
Ramann added, “In this foray, we are happy to commence the first co-lending arrangement with Ambit Finvest, which will help provide affordable business loans to lower segment of the MSMEs. While most of the tie-ups in co-lending space have been for secured loans, our partnership with Ambit Finvest is one of the earliest such arrangements for unsecured Business Loans”.
Sanjay Agarwal, CEO, Ambit Finvest added, “We are delighted to partner with SIDBI in increasing its reach to meet the credit requirements of the MSME segment. The alliance with SIDBI will enable Ambit Finvest to reach wider geographies and offer unsecured business loans at a blended lower rate of interest to many MSMEs who currently face challenges of higher interest rates, and hence are excluded from access to Banking services. Also, a co-lending partnership with a pioneering organisation like SIDBI will help Ambit Finvest further expand its footprint in the MSME segment”.
CMD SIDBI believes that efficient use of data and digital strategies would be key to reach to the still excluded MSME segment. Going forward, he said, fully automated seamless data flow through co-lending tech platforms, backed by a robust API integration layer in the backend, would prove to be a milestone in achieving the long-cherished dream of serving the smallest of the businesses in the country in an affordable manner, thereby realising the ‘Atma-nirbhar Bharat’ vision of the Government of India.