Under the partnership, both the companies will share risks and rewards involved in the lending business. It aims to create a conducive lending environment for Indians to fulfil their ambition of homeownership, EHFL said in a release.
For EHFL, co-lending represents an alternate model of disbursals that is asset-light and creates a sound revenue model for sustainable business, whereas for SBI — which brings capital flows at lower costs — the partnership provides wider customer reach.
For customers, co-lending provides simplicity of dealing with a single entity for their financing needs up to Rs 35 lakh, in addition to benefiting from blended cost-effective interest rates.
“This collaboration will enhance our distribution network, as we aim to extend our 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,” Dinesh Khara, Chairman State Bank of India, said.
EHFL MD and CEO Rajat Avasthi said: “Owning a home is an important milestone and dream for every Indian. And this partnership will help us fulfil that deep-rooted aspiration for Indians. I believe easy availability of home loans will also lead to higher demand in the real estate sector, which is a key driver for economic growth as well”.
The co-lending model is an evolutionary agreement that combines the expertise of public sector banks with the strong origination expertise and reach of HFCs, EHFL said.