Karnataka Bank, Satin Creditcare Network sign co-lending agreement

Private sector Karnataka Bank (KBL) and Satin Creditcare Network Ltd (SCNL), a NBFC-Micro Finance Institution (MFI), have entered into a co-lending arrangement to provide financial support to Joint Liability Groups (JLG) of economically active women in both rural and semi-urban areas and to give impetus to the microcredit facilities segment of the country.

Credit flow

In line with the Reserve Bank of India’s guidelines on co-lending by banks and NBFCs to priority sectors to improve the flow of credit to unserved and underserved segments, the arrangement will leverage Karnataka Bank’s low cost of funds and the end-to-end digital capabilities of KBL and Satin through the Yubi platform for co-lending to help in the sourcing, servicing, and recovery of small-ticket income-generating priority sector loans, according to a company release.

Srikrishnan H, Managing Director & CEO, Karnataka Bank, said: “We are happy to enter into this strategic co-lending arrangement with Satin through the platform of Yubi, our fintech partner. This is part of our stated strategy to collaborate and growth our advances book in alliance with fintech partners and control the inflow with the bank’s credit standards.”

The move is expected to improve the bank’s presence in the area of microcredit facilities in rural and semi-urban areas. In addition, digital co-lending partnerships covering multiple credit areas will be pursued by them to create a sustainable focus on economic empowerment and financial inclusion, the MD added.

According to HP Singh, Chairman-cum-Managing Director of SCNL, the collaboration will uplift women entrepreneurs in rural and semi-urban India, thereby enhancing sustainable economic growth. Co-lending opens the door to more opportunities for broadening their presence.