Indian Economy News

TruCap Finance Limited (TRU) and Housing Development Finance Corporation (HDFC) Bank signed a co-lending contract with the Micro, Small, & Medium Enterprises (MSME) borrowers

  • IBEF
  • September 25, 2023

A cooperation between TruCap Finance Limited (TRU) and Housing Development Finance Corporation (HDFC) Bank was announced with the goal of providing loans to Micro, Small & Medium Enterprises (MSME) and other underserved borrowers.

In accordance with the agreement, TRU will use its Lending-as-a-Service (L-a-a-S) model to provide underserved borrowers, mainly in rural areas, with high-quality credit solutions. Both HDFC Bank and TRU will extend MSME business loans and gold loans under this collaboration.

According to industry estimates, the MSME sector has a total credit demand of Rs. 69.3 trillion (US$ 840 billion), which is rising at a Compound Annual Growth Rate (CAGR) of 11.5%. Less than 15% of this demand is satisfied through official loan channels. TRU, a company that specialises in MSME lending, places a strong emphasis on providing cheap credit solutions meant to encourage the expansion of small enterprises.

According to Mr. Rohan Juneja, Managing Director and Chief Executive Officer of TRU, both parties will profit from TRU's sourcing, distribution, evaluation, and collection capabilities in non-urban regions thanks to the relationship with HDFC Bank. This guarantees efficient capital deployment to enable last-mile credit delivery.

TRU has already disbursed over Rs. 2,000 crore (US$ 241.2 million) in loans, aiding more than 190,000 customers and contributing to the credit inclusion of underserved businesses. The company's expansive network includes more than 118 branches scattered across over 50 cities in the MSME clusters of West, Central, and North India. Due to its widespread presence, TRU is able to provide small businesses with rapid lending solutions for a variety of purposes, including obtaining working capital or purchasing assets, hence improving revenue and livelihood development in non-metro areas.

The partnership with TruCap helps in expanding financial inclusion to the last mile customer and provides them with convenience, speed, and affordability, says Mr. Sumant Rampal, Group Head, Business Banking & Rural Banking, HDFC Bank. Through collaborative efforts, there's a connection with clients in the semi-urban, rural, and mini-micro-segment of MSMEs. With quick approvals, competitive rates, and extended reach, this collaboration empowers more individuals and businesses to fulfill their dreams.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.