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Edelweiss Group, Bank of Baroda to co-lend to SMEs

Posted On: 2019-06-12 17:54:59

ECL Finance Limited, a subsidiary of Edelweiss Financial Services Limited and flagship NBFC of Edelweiss Group and Bank of Baroda, India's second largest public sector bank, today signed an agreement to form a strategic partnership to explore Co-lending / Co-Origination opportunities. With this partnership, ECL Finance Limited and Bank of Baroda will jointly offer loans and expertise for the growing needs of MSME and self-employed as well as priority sector groups.

Under the arrangement, both partners can widen their respective markets and offer timely delivery of credit to customers at a significantly lower cost.

Speaking on the development, Rashesh Shah, Chairman & CEO of Edelweiss Group said, "We are delighted to be partnering with Bank of Baroda in this excellent initiative by Shri P Jayakumar, MD. Bank of Baroda, in increasing the reach of credit to service the needs of a large section of India. I do believe that this model of partnership between banks and NBFCs is here to stay, truly democratising access to credit."

Speaking on the announcement, Vikramaditya Singh Khichi, Executive Director, Bank of Baroda said, "The SME sector is the backbone of the Indian economy, providing millions of jobs, and contributing a significant chunk to industrial growth and the country's exports. There is huge potential that is untapped in the SME space. Co-lending partnerships between large organisations like Bank of Baroda and leading players in finance like Edelweiss will contribute to the overall enhancement of the SME industry, as these enterprises need funding for adopting new technology that will enhance their growth and in turn boost India's economic growth."

Deepak Mittal, MD & CEO, ECL Finance added, "With this alliance, we expect to create a win-win situation for all three stakeholders - our customers, Bank of Baroda and Edelweiss. This partnership will help Edelweiss keep the needs of our customers foremost and provide them with affordable and timely credit while our proven ability in origination, credit assessment and monitoring asset quality will enhance the portfolio. We believe best use of technology will enable wide reach and enhance servicing capability to this underserved and socio economically important customer segment."

The Credit business has been a significant growth engine for the Edelweiss Group with the retail credit segment having grown to 50% of the total book at over INR 18000 crore at the end of FY19. The business has both size and scalability with a growing presence pan India. The overall Credit business has remained resilient amidst tough market conditions due to the sheer strength of its diversified business model, robust risk mitigation and credit assessment as well as superior asset quality and low NPA levels.

In recent months, the Edelweiss Group has cemented several partnerships with marquee global institutions including Caisse de dépôt et placement du Québec (one of North America's largest pension funds), Allianz Investment Management (part of Allianz Group, one of the world's largest insurers) and Bank of Singapore across market leading platforms in its NBFC ECL Finance, Private Debt and Wealth Management business. Recently, US-based Arthur J. Gallagher & Co. (one of the world's largest insurance brokerage firms) also announced that it will be acquiring a minority stake in Edelweiss Insurance Brokers Limited (EIBL).

Shares of Edelweiss Financial Services Ltd. was last trading in BSE at Rs.180.5 as compared to the previous close of Rs. 183.9. The total number of shares traded during the day was 34931 in over 820 trades.

The stock hit an intraday high of Rs. 184.5 and intraday low of 180.1. The net turnover during the day was Rs. 6348034.


Source: Equity Bulls

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