Shriram Housing partners with SBI for co-lending to affordable housing
"Together we would be able to serve a much larger customer base, especially borrowers at the bottom of the pyramid. Through the co-lending model, we intend to leverage the balance sheet strength of SBI and our underwriting capabilities," Ravi Subramanian, MD & CEO of Shriram Housing Finance was quoted as saying in a release.
Shriram Housing Finance has signed a co-lending agreement with the State Bank of India (SBI) for priority sector affordable home loans, the company said in a release. Both entities will jointly service housing loan customers as per the 20:80 co-lending model of the Reserve Bank of India (RBI).
“Together we would be able to serve a much larger customer base, especially borrowers at the bottom of the pyramid. Through the co-lending model, we intend to leverage the balance sheet strength of SBI and our underwriting capabilities,” Ravi Subramanian, MD & CEO of Shriram Housing Finance was quoted as saying in a release.
The mortgage lender will originate, process and service the loans. It will target priority sector housing loans in the affordable housing segment under the pact. Shriram housing’s priority sector lending accounts for around 40% of the total loan portfolio. The company plans to leverage the extensive network and infrastructure of the Shriram Group to grow its presence in the emerging middle-class segment, and reach the last mile customer.
SBI chairman Dinesh Kumar Khara said that the collaboration with Shriram Housing will enhance their distribution network as they aim to extend credit reach to more home loan borrowers of the unserved and underserved segments. “Such partnerships align with our commitment to accelerate effective and affordable credit to small home buyers in India and contribute to the vision of “Housing for All by 2024,” Khara added.
SHFL has provided affordable home loans to over 1 lakh customers, including households that belong to the lower end of the income spectrum, especially with informal sources of employment and income. The company also plans to leverage the extensive network and infrastructure of the Shriram Group to grow its presence in the emerging middle-class segment, and reach the last mile customer.
As per the release, the Shriram Group has a consolidated customer base of over 21.5 million. It posted a net profit of Rs 49 billion for FY21 with assets under management of over Rs 1.75 trillion as of March 2021.