Satin Creditcare signs co-lending deal with Karnataka Bank, shares give up gains

Shares of Satin Creditcare have risen 47.36 percent in 2023, while Karnataka Bank stock has gained 51.81 percent during the same period.

Shares of Satin Creditcare Network jumped around 5 percent before giving up its gains to trade in the red on December 29. The microfinance institution has entered into a master agreement for co-lending of loans to microfinance borrowers through a co-lending module in tranches with Karnataka Bank.

Satin Creditcare Network will also act as the service provider, and the collections and monitoring will be managed by the company. The ratio of the funds will be 80:20, with the bank funding the larger portion.

As of 11.40 am, shares were trading at Rs 240.1 apiece on the NSE, lower by 0.15 percent compared to the closing price of the previous session. Karnataka Bank shares were also trading in the red, down by 0.4 percent at Rs 234.25 per share.

The agreement for providing microfinance loans is within the limits set by the RBI and its guidelines for lending to the priority sector.

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The rationale for signing the agreement, according to Satin Creditcare Network is “to leverage the competitive advantage of banks and NBFCs in a collaborative effort to provide affordable credit to a large number of existing and new customers of the company.”

So far in 2023, shares of Satin Creditcare have risen 47.36 percent, while Karnataka Bank stock has gained 51.81 percent during the same period. In comparison, the benchmark index Nifty 50 has gained around 19 percent during the same time period.

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