TruCap Finance Limited, a leading NBFC focused on the MSME sector, has entered into a co-lending partnership with HDFC Bank, India’s largest private sector bank, to provide affordable and hassle-free credit solutions to underserved MSME borrowers.
The co-lending model (CLM), introduced by the Reserve Bank of India in November 2020, allows banks and NBFCs to collaborate for lending to priority sectors, such as agriculture, MSMEs, housing, etc. Under this model, both the lenders share the risk and reward in a predetermined ratio, while the NBFC acts as the single point of contact for the borrower.
TruCap and HDFC Bank have signed a memorandum of understanding (MoU) to leverage their respective strengths and offer customized loans to MSMEs across India. The partnership aims to enhance credit flow to the MSME sector, which has been severely impacted by the Covid-19 pandemic and the subsequent lockdowns.
Mr. Rajesh Sharma, Managing Director and CEO of TruCap, said, “We are delighted to partner with HDFC Bank, one of the most trusted and respected banks in the country, for co-lending to MSMEs. This partnership will enable us to reach out to a larger number of MSMEs who need timely and adequate credit support to grow their businesses. We believe that co-lending is a win-win proposition for both the lenders and the borrowers, as it combines the low cost of funds of banks with the wide reach and customer-centric approach of NBFCs.”
Mr. Arvind Vohra, Group Head – Retail Banking of HDFC Bank, said, “We are happy to join hands with TruCap, a well-established NBFC with a strong focus on the MSME segment. We believe that co-lending is an innovative and efficient way of providing credit to this vital sector of the economy, which contributes significantly to employment generation and GDP growth. Through this partnership, we aim to offer tailor-made products and services to MSMEs at competitive rates and with faster turnaround time.”
TruCap and HDFC Bank will jointly offer loans ranging from Rs. 1 lakh to Rs. 20 lakhs to MSMEs for various purposes, such as working capital, business expansion, machinery purchase, etc. The loans will be available for tenures up to 60 months, with flexible repayment options. The borrowers will also benefit from the simplified documentation process and quick disbursal of funds.
The co-lending partnership between TruCap and HDFC Bank is expected to benefit over 10 lakh MSMEs in the next three years. The partnership will also help in achieving the government’s vision of making India a $5 trillion economy by 2025.
This post TruCap and HDFC Bank join hands to offer co-lending solutions for MSMEs was originally published at Finance Crave
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