Piramal Finance & Central Bank of India Partners to Form Strategic Co-Lending Partnership

Current Context: Piramal Finance and Central Bank of India announced their strategic co-lending partnership on August 23, 2024.

• Here are the key details:
• Objective: The partnership aims to provide affordable financing solutions to small businesses and retail borrowers, enhancing financial inclusion.
• Co-Lending Model: Under this model, both institutions will jointly contribute to the loan amount. This allows for a larger pool of funds and better risk management.
• Target Segments: The focus will be on micro, small, and medium enterprises (MSMEs) and retail customers, particularly in underserved and unserved regions.

Question:

1 Under the co-lending model between Piramal Finance and Central Bank of India, how is the loan amount managed?

• A) The entire loan is funded by Piramal Finance
• B) The entire loan is funded by Central Bank of India
• C) Both institutions jointly contribute to the loan amount
• D) The loan is funded through external investors

Answer: C) In the co-lending model, both Piramal Finance and Central Bank of India jointly contribute to the loan amount, allowing for a larger pool of funds and better risk management.