Central Bank of India Partners with Shriram Finance for MSME Loans

Central Bank of India has announced a strategic Co-Lending Partnership with Shriram Finance Limited, aimed at offering MSME (Micro, Small, and Medium Enterprises) loans at competitive rates.

This partnership is subject to compliance with applicable laws and guidelines set by the Reserve Bank of India (RBI). The collaboration is designed to enhance the portfolio expansion for both Central Bank of India and Shriram Finance Limited.

Shriram Finance Limited, a Non-Banking Finance Company (NBFC) registered with the RBI, is a prominent entity in the Shriram Group and one of India’s largest retail asset financing NBFCs, with assets under management (AUM) of ₹2.33 trillion.

Established in 1979, Shriram Finance Limited has established itself as a comprehensive finance provider, serving small road transport operators and small business owners. It is particularly recognised for its expertise in the organised financing of pre-owned commercial vehicles and two-wheelers. The company has a vertically integrated business model and provides a range of financial products, such as loans for passenger commercial vehicles, tractors and farm equipment, personal loans, working capital loans, and loans against gold ornaments. Shriram Finance Limited operates a pan-India network of 3,095 branches and employs over 75,000 staff, serving more than 8.7 million customers.

Under the new co-lending arrangement, Shriram Finance Limited will be responsible for originating and processing MSME loan proposals based on jointly established credit parameters and eligibility criteria. Central Bank of India will then take on 80% of these MSME loans into its books under mutually agreed terms. Shriram Finance Limited will continue to service these loan accounts throughout their life cycle.

This partnership is expected to enhance customer experience and satisfaction by providing convenient and accessible loan services while expanding the reach of both institutions across India. The collaboration aims to leverage the strengths of both organisations to better serve the MSME sector and support its growth and development.

On August 1, 2024, the share price of Central Bank of India Ltd opened at ₹63.90, touching the day’s high at ₹64.38, as of 10:34 AM on the NSE.

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