Arka Fincap & Central Bank of India Entered Co-lending Partnership to Offer MSME Loans

Current Context: Arka Fincap, a non-banking financial company and part of the Kirloskar Group, recently announced a co-lending partnership with the Central Bank of India to provide loans to Micro, Small, and Medium Enterprises (MSMEs) in India.

Here are the key details:

• Partnership Details:

• Arka Fincap will originate and process the loans.
• Central Bank of India will fund 80% of the loans.
• The collaboration aims to offer competitive rates to MSMEs and expand financial services across India.
• Arka Fincap’s strategy is to grow its loan book to Rs 7500 crore by FY25, with a focus on MSME lending.
• The co-lending arrangement aligns with Arka’s goal to fill the credit gap for MSMEs and position itself as a preferred NBFC in the business loan segment.

• Arka Fincap’s Business Segments:

• Arka operates in four main segments: MSME & SME lending, corporate lending, real estate and urban infrastructure financing, and syndication.
• As of March 31, 2024, Arka had an AUM (Assets Under Management) of Rs 5,200 crore, with retail AUM constituting 50% of the total.
• The company aims to have MSME loans account for 75% of its book and plans to expand its branch presence across India

Question:

1 What percentage of the loans will the Central Bank of India fund in the co-lending partnership with Arka Fincap?

• A) 50%
• B) 60%
• C) 80%
• D) 90%

Answer: C) Arka Fincap will originate and process the loans. The Central Bank of India will fund 80% of the loans.