The Bank of Baroda announced that its new co-lending partnership with the U GRO Capital. The latter is a Non-Banking Financial Company (NBFC) that specializes in the provision of loans to micro, small and medium enterprises (MSMEs). The program launched under revised co-lending guidelines where the NBFC will be doing its co-lending under the product name of ‘Pratham’, alongside the Bank of Baroda. The first disbursement of loans under this co-lending scheme was launched on the 114th Foundation Day of the Bank of Baroda, which fell on July 20, 2021. This step makes the Bank of Baroda one of the first Public Sector Banks (PSBs) to co-lend with U GRO Capital.
This joint venture will provide the MSMEs who apply for it a customised lending solution at competitive rates, said a press release. This interest rate will come with a significant reduction in turn-around time. It was also said in the release that the loan amount would range from Rs 50 lakh to an upper maximum of Rs 250 lakh. The interest rate on these loans will clock in at a baseline of 8 per cent with a maximum tenure of 120 months.
The aim of this partnership is apparently for both the financial entities to ‘serve the unserved MSMEs’ by leveraging low-cost funds of the Bank and the higher reach potential of the NBFC so as to cover both fronts and give loan recipients the best of both worlds. As of now, the scheme is accessible across more than 200 channel touchpoints that are located in nine large centres the release said. These centres are in locations such as Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Jaipur, Kolkata, Mumbai and Pune. In order to streamline its efforts and speed up the delivery of loans, the Bank of Baroda has established a centralised processing unit in Gujarat’s Gandhi Nagar.
Speaking on the co-lending programme during the inauguration of the scheme, Shri Vikramaditya Singh Khichi, Executive Director, Bank of Baroda said, “We are glad to have joined hands with U GRO Capital by way of this co-lending program, which resonates with our intent to extend support to more MSMEs. We believe that forging such partnerships is the way forward and collaborative efforts leveraging individual entities’ expertise are of utmost importance to take co-lending to the MSME segment to the next level. This is a significant advancement in the same direction.”
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The Bank of Baroda is a leading public sector bank in the country due to its strong presence which is further enhanced by its self-service channels. It also carries under its banner a network of around 8,300 branches, 11,600 ATMs and Cash Recyclers. The presence it has in India aside, the bank also has a significant presence in the international territory as it has over 96 branch officers in around 19 countries. Founded in July of 1908, this bank has wholly-owned subsidiaries which include BOB Financial Solutions Limited (erstwhile BOB Cards Ltd.), BOB Capital Markets and Baroda Asset Management India Ltd. Bank of Baroda also has joint ventures for life insurance with the IndiaFirst Life Insurance Company Limited and India Infradebt Ltd.
It should be noted that this financial titan also sponsored other Regional Rural Banks in the past. These banks are Baroda Uttar Pradesh Gramin Bank, Baroda Rajasthan Gramin Bank and Baroda Gujarat Gramin Bank.
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