Bank of Baroda, one of India’s leading public sector banks, and Paisalo Digital Ltd., a leading systemically important non-deposit taking NBFC registered with the Reserve Bank of India, announced that they have signed a Co-Lending Loan Agreement. This partnership will provide access to small-ticket finance for income generation to the country’s micro, small and medium enterprises (MSMEs) and women entrepreneurs.
Reserve Bank of India’s circular on co-lending by banks and NBFCs to the priority sector to improve the flow of credit to unserved and underserved segments, Bank of Baroda and Paisalo’s co-lending arrangement will leverage the Bank’s low cost of funds & credit assessment expertise combined with Paisalo’s rule engine-based loan origination and underwriting capabilities, with the help of an end-to-end digital platform for sourcing, servicing and recovery of small-ticket income generation priority sector loans.
Santanu Agarwal, Deputy CEO, Paisalo Digital Ltd., said: “Paisalo sees a huge opportunity and is well-positioned to capitalise on the huge Rs. 8 lakh crore market of small-ticket loans for India’s 365 million under-banked and under-serviced population. The Bank of Baroda-Paisalo Co-Lending Product is a big step towards Paisalo’s goal of creating the most competitive and seamless banking solution for India’s Bottom of the Pyramid population.”
Dhrubashish Bhattacharya, Head – MSME Business, Bank of Baroda, said: “This agreement with Paisalo enables Bank of Baroda to tap and serve a substantial market segment – small businesses, women-led enterprises, agri / allied agri ventures – which hitherto have found it difficult to access formal sources of financing. With the right support, many such businesses have the potential to grow and expand, providing livelihood and employment opportunities to many more. As per RBI’s co-lending norms, this arrangement between Bank of Baroda and Paisalo will help us in extending credit to the priority sector and promoting financial inclusion.”