Axis Bank and Shriram Housing Finance Limited (SHFL) have joined hands under the co-lending model to provide secured loans to middle and low-income segment borrowers in rural and semi-urban areas of India.

The partnership will offer secured MSME (Micro, Small and Medium Enterprises) loans and home loans through the Yubi Co.Lend platform. The collaboration aims to leverage the financial expertise of Axis Bank and the loan processing technology of SHFL to assess the credit profile of borrowers and provide loans at competitive interest rates.

The partnership will also cater to potential customers who are either new to credit or have not been tapped by larger institutions. This collaboration is expected to build a secured loan book for the two lenders, while the Yubi platform will enable them to process loans seamlessly per the co-lending guidelines.

The co-lending model allows two lenders to share the risk and reward of a loan, with one lender providing the majority of the loan amount and the other lender contributing a smaller percentage. This model enables banks and financial institutions to reach more customers and offer loans at competitive interest rates.

The partnership between Axis Bank and SHFL is a strategic move to tap into the growing demand for loans from the MSME and housing sectors, particularly in rural and semi-urban regions. By leveraging their respective strengths, the two lenders aim to impact the lending landscape in India significantly.

The collaboration is also expected to benefit borrowers with limited access to credit due to their location or financial profile. With competitive interest rates and streamlined loan processing, potential customers in rural and semi-urban areas will have access to previously unavailable loans.