A non-deposit taking NBFC, has announced the formalisation of an expanded Co-Lending Loan Agreement for SME products with the State Bank of India (SBI), India's largest public sector bank.
Paisalo Digital in a regulatory filing, said the agreement represents an extension of the existing partnership between the two entities, aiming to further strengthen their collaborative platform for inclusive credit delivery across the nation.
The initiative is designed to drive financial inclusion by offering low-cost financial solutions to priority sectors, particularly Small and Medium Enterprises (SMEs), through enhanced financial assistance.
| Particular | Detail |
|---|---|
| Parties Involved | Paisalo Digital Limited and State Bank of India (SBI) |
| Agreement Type | Co-Lending Loan Agreement for SME Products |
| Formalisation Date | June 26, 2025 |
| Objective | Provide low-cost financial solutions to priority sectors, including SMEs, driving financial inclusion. |
| Alignment | RBI guidelines on co-lending (November 5, 2020) |
Agreement Details
The newly signed Co-Lending Loan Agreement for SME Products builds upon the already operational co-lending digital platform that Paisalo and SBI established in 2021. This extension signifies a deeper commitment to their collaborative efforts in credit delivery. The arrangement is fully compliant with the Reserve Bank of India's (RBI) guidelines on co-lending of loans, which were issued on November 5, 2020. These guidelines are specifically designed to enhance credit flow to critical priority sectors, including micro, small, and medium enterprises (MSMEs), by leveraging the combined strengths and extensive reach of both banks and Non-Banking Financial Companies (NBFCs). The partnership aims to synergize Paisalo's robust distribution network in rural and semi-urban areas with SBI's extensive banking infrastructure.
Strategic Implications
Under this expanded co-lending arrangement, SBI and Paisalo Digital will jointly fund SME loans, thereby facilitating broader access to formal credit for India's rapidly expanding base of small businesses. This initiative is particularly crucial for enterprises located in tier 2, tier 3 cities, and rural markets, where access to formal financial services can often be limited. The SBI-Paisalo co-lending platform is a comprehensive digital solution that offers end-to-end services, encompassing loan origination, processing, disbursement, servicing, and recovery. This integrated approach ensures a high degree of efficiency and transparency throughout the entire loan lifecycle, streamlining the credit delivery process for borrowers. By focusing on SME products, the partnership directly addresses a significant segment of the Indian economy that requires consistent and affordable financial support for growth and sustainability.
Management Commentary
Commenting on this strategic development, Mr. Santanu Agarwal, Deputy Managing Director of Paisalo Digital Limited, highlighted the shared vision underpinning the agreement. He stated, "This new arrangement with SBI underlines our shared vision to expand affordable and timely credit access to the backbone of the Indian economy." Mr. Agarwal further emphasized the strategic advantage of the collaboration, noting, "By leveraging our integrated physical and digital approach and SBI's robust banking infrastructure, we are positioned to scale our impact, drive entrepreneurship, and contribute meaningfully to employment generation across the country." His remarks underscore the potential for the partnership to foster economic growth and create employment opportunities, particularly in underserved regions.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
