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

Published on July 22, 2024
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.
Arka Fincap & Central Bank of India Entered Co-lending Partnership to Offer MSME Loans
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%
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