Co-Lending Could Accelerate Last-Mile Credit: IIFL Finance

IIFL Finance announced today that bank-NBFC co-lending partnerships have the potential to transform the way formal credit is extended to underserved borrower segments, ushering in the next phase of financial inclusion in India.

Commenting on the evolving credit landscape, Mr Mayank Sharma, Head – Gold Loan, IIFL Finance, said, “India’s journey towards financial inclusion must now ensure that credit reaches entrepreneurs, farmers, independent professionals, and MSMEs across Bharat in a timely and responsible manner.”

He added, “The goal of financial inclusion today is to provide affordable institutional credit to everyone aspiring to become an entrepreneur. The co-lending model brings together the strengths of both banks and NBFCs.”

Explaining further, he said, “Banks provide cost-efficient funding and well-capitalised balance sheets, while non-banking financial companies contribute local market intelligence, last-mile delivery, and strong customer relationships in underserved regions. Together, they can expand access to credit and make the lending process faster, more efficient, and more formalised.”

Mr Sharma welcomed the Reserve Bank of India’s co-lending framework, stating that it has brought greater clarity on governance, risk-sharing, and consumer protection, thereby creating a strong foundation for effective collaboration between banks and NBFCs.

He also highlighted the role of the Government’s digital public infrastructure, including Jan Dhan, Aadhaar, UPI, and the Account Aggregator framework, in enabling the next phase of credit delivery.

“Through digital onboarding, AI-driven underwriting, and secure data sharing, technology has made co-lending significantly more efficient. Combined with India’s digital public infrastructure, it has the potential to transform last-mile lending,” he noted.

Highlighting the importance of co-lending for India’s MSME sector, Mr Sharma said, “Regional NBFCs possess a deep understanding of local business practices and income patterns, enabling them to serve customers who may not meet traditional lending criteria.”

He concluded, “The success of co-lending will ultimately be measured by the number of entrepreneurs it empowers, businesses it finances, and livelihoods it creates. Co-lending can become a key pillar of the next phase of financial inclusion in India, ensuring that opportunity is determined not by location but by aspiration.”

About IIFL Finance

IIFL Finance is one of India’s leading non-banking financial companies (NBFCs), offering a wide range of loans and financial products, including gold loans, mortgages, business loans, microfinance, loans against property, and capital market finance. The Company is committed to advancing financial inclusion by expanding access to formal credit across India.