The country’s second largest state-owned lender, Bank of Baroda, on Monday announced that it had plans to lend up to Rs 1,000 crore in tandem with 16 non-banking financial companies (NBFCs) and microfinance institutions (MFIs) in the current quarter.
With this step, the bank will get new accounts, to whom they will be cross-selling other products as well. At the same time, NBFCs will get an opportunity to grow their business – asset under management – without facing any capital constraints or funding related challenges.
The bank will fund 80-90 per cent of the total loan amount depending upon the seasoning.
Papia Sengupta, executive director, said, “Economic slowdown can only be aided with the growth in rural consumption. NBFCs and housing finance companies (HFCs) are more close to the rural and semi-urban population of the country. Co-origination with NBFCs, at the time when they are facing liquidity issues, will help the economy to grow.”
Rural is not only the agri-sector but also labourers, if they have more money, their consumption will go up, she added. —FE