Non-bank financial company Arka Fincap, a part of Kirloskar Group on Wednesday announced that it had partnered with Central Bank of India to offer MSME loans.
Under the co-lending arrangement, Arka will offer loans to MSMEs at competitive rates and further expand its reach across India.
As part of the collaboration, Arka will originate and process loan proposals for the MSME sector as per jointly formulated credit parameters and eligibility criteria.
“This partnership aligns with our strategy to expand our retail lending portfolio,” said
Amit Kumar Gupta, Group Chief Financial Officer, Arka Fincap. “It positions us well to explore new growth opportunities and adapt to the ever-evolving financial landscape to change the story of India’s MSME sector to get ahead.”
While Central Bank of India will take 80% of the loans into its books under mutually agreed terms. Arka will service the accounts throughout the life cycle of the loans.
“The co-lending partnership with Central Bank of India is a step towards our goal to fill the credit gap of MSMEs, grow our portfolio and be the first-choice NBFC in the business loan segment for the MSME sector,” said Navin Saini, Chief Business Officer – Retail & MSME, Arka Fincap. “This partnership represents a significant step towards achieving these long-term strategic goals. The competitive rates offered would benefit the MSMEs availing the loan.”
Arka operates in four main business segments: MSME & SME lending, corporate lending, real estate and urban infrastructure financing and syndication.
As on 31st March 2024, Arka had an AUM of Rs 5,200 crore and 31 branches spread across 13 states with the retail AUM constituting 50% of the total AUM.
It aims to grow its book to Rs 7500 crore for FY25 out of which Rs 5000 crore will come from MSME lending. The non-bank lender wants MSME loans to hold 75% weightage in its books. It also plans to be present across 45 branches.
The NBFC is also looking to increase its branch presence to gain market share. The lender has 32 branches and will look to increase branches to 60 by the end of fiscal year.
