Credit and Finance for MSMEs: Public sector lender Bank of Baroda (BOB) has partnered with NBFC Paisalo Digital to lend co-originate loans to MSMEs and agribusinesses. Prospective customers will be reached out by the bank and Paisalo followed by the due diligence to offer loans between Rs 10,000 and Rs 40,000. The agreement will focus on empowering small businesses particularly in the state of Uttar Pradesh (UP). “We are starting the scheme with UP. The learning and data developed, will then be incorporated into the credit matrix algorithm so that machine learning and artificial intelligence protocols may have a better understanding. This will help us start operations in other states of the country, with aggressive customer acquisition and stringent risk mitigation,” Santanu Agarwal, Chief Innovation Officer, Paisalo Digital told Financial Express Online.
Earlier State Bank of India and Bank of Maharashtra have also partnered with Paisalo following the Reserve Bank of India notification in September last year for co-origination of loans by banks and NBFCs for lending to priority sectors. The agreement between BOB and Paisalo will target “Rs 20 crore monthly disbursements with an average ticket size of Rs 30,000,” Agarwal said.
In terms of underwriting these loans to SMEs, 80 per cent will be on BOB’s books and rest on Paisalo books. The NBFC claimed of “serving 12 lakh customers with cumulative aggregate disbursements of Rs 13,600 crores and having assets worth Rs 2,100 crores under management,” he added.
With respect to the grievance redressal, the RBI in its notification had stated that the complaint registered by a borrower with the NBFC and bank shall also be shared with the bank and NBFC even as the borrower can raise the issue with the concerned ombudsman for bank or NBFC; in case the complaint is not resolved within 30 days, the borrower would have the option to escalate the same with the concerned Banking Ombudsman/ Ombudsman for NBFCs.