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Last Updated : Jan 17, 2020 10:08 PM IST | Source: Moneycontrol.com

Lenders take digital route to co-lending with NBFCs

Banks like HDFC Bank, ICICI Bank, Axis Bank, YES Bank, Bank of Baroda, Oriental Bank of Commerce, and NBFCs like Mahindra & Mahindra Financial Services apart from Srei Equipment Finance have signed up to lend and co-lend via iQuippo.

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It has been over 15 months since the regulator permitted co-origination of loans with non-banking finance companies (NBFCs), but the model is yet to see traction.

While there were delays in finalising the aspects such as risk sharing in these tie-ups, most banks were also inclined to partner with digital portals to be able to scale up the model.

iQuippo.com, a digital platform for equipment financing that belongs to the same parent entity as Srei Infrastructure Finance, has brought on board private and state-run lenders along with NBFCs for co-lending.

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"Ever since the concept of co-lending was introduced by RBI at the end of 2018, we have been observing the market and noticed that the volumes have not been high through this model. Our research showed that the primary reason for low volumes was the slow turnaround time," said Anant Raj Kanoria, CEO, iQuippo.

Extending loans for equipment financing usually takes upto a week once the borrower approaches lenders after finalising the product to be purchased. This has been reduced to few minutes with the help of the portal.

Banks like HDFC Bank, ICICI Bank, Axis Bank, YES Bank, Bank of Baroda, Oriental Bank of Commerce and NBFCs like Mahindra & Mahindra Financial Services apart from Srei Equipment Finance have signed up to lend and co-lend via iQuippo.

For lenders, the portal is a way to save up cost of customer acquisition and due dilligence as they can access the borrower's credit history before sanctioning loans.

The loan-to-value is usually between 80-90 percent for equipments that cost between Rs 25-50 lakh, depending on the customer profile, iQuippo said.

The portal, that was jointly developed with IBM, has almost 90,000 active users, 134 original equipment makers (OEMs) for new and 271 OEMs for used equipment. Customers can buy as well as sell second hand equipment on the portal.

iQuippo said that the gross merchandise value (GMV) of equipments sold on the portal was over Rs 200 crore in December 2019 and has been growing at 20-25 percent on monthly basis.

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First Published on Jan 17, 2020 10:08 pm
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